The 6am Cut London

Most Asian stocks rose and the MSCI Asia-Pacific index rose 0.2% to near a three-month high, after US housing permits rose to a four-year high. (Bloomberg)

The White House is again studying a release of strategic oil reserves. The US administration is looking to see whether petrol prices fall after Labor Day on September 3, as they historically have done. A co-ordinated international release was discussed earlier in the year but shelved when prices fell (Reuters). Oil demand is robust despite sluggish global economic growth (Financial Times).

Argentinian wheat farmers have planted their smallest crop by land area in 110 years as a result of dry conditions. The lower yield will add to upward price pressures on wheat from the US droughts (Financial Times).

Facebook shares dropped below $20 to a new low after the first expiration of a ban that prohibited pre-IPO investors from trading their holdings, releasing 271m shares. The company is the worst performer on both the S&P 500 and Nasdaq 100 since its listing on May 17 at $38 a share, according to S&P Capital IQ. A larger tranche will be released in November when employees are allowed to trade their shares (Financial Times).

Wal-Mart’s 2Q earnings grew 5.7% but the retailer warned of continuing tough economic conditions and said US customers living paycheck-to-paycheck was “pronounced” (Wall Street Journal). Wal-mart is slowing its opening of new stores in China and Brazil after admitting it had made mistakes and let profitability slip in its haste to expand. Walmart International cut its plans for new store space this year by about 30%, which will reduce its capital expenditure by about $500m (Financial Times).

Brevan Howard co-founder Rokos to leave: Christopher Rokos, co-founder of Europe’s second largest hedge fund manager, Brevan Howard, is to leave the firm. Mr Rokos is one of the most prominent hedge fund traders in the industry, and was one of the wealthiest men in Britain until he moved to Geneva with Brevan in 2010 (Financial Times).

A former Morgan Stanley executive was sentenced to nine months in prison for transferring multi-million dollar interests in a Shanghai building from his employer to himself and a Chinese official. Garth Peterson was sentenced on Thursday by US District Judge Jack Weinstein in New York, for conspiring to circumvent internal bank controls required under the Foreign Corrupt Practices Act, an offence that can carry a maximum penalty of five years imprisonment (Bloomerg).

Global demand for gold is seeing a significant slowdown as top consumers in India and China pare purchases amid weak economic growth, abruptly halting a consumption boom that started five years ago with the onset of the financial crisis. Demand is at the lowest level since the first quarter of 2010 and down 7% from last year (Financial Times).

COMMENT AND CURIOS

- Business executives around the world prefer Obama to Romney, according to FT/Economist poll. (Financial Times)

- What Romney did then: The story of an early Bain Capital deal. (Financial Times)

- Founders of MMF that ‘broke the buck’ blame US government ahead of trial. (Wall Street Journal)

- Are junk bond investors underestimating risk? (Financial Times)

- English lessons at 85 and other features of Japan’s labour market. (Bloomberg)

OVERNIGHT MARKETS: UP

Asian markets
Nikkei 225 up +82.00 (+0.90%) at 9,175
Topix up +4.86 (+0.64%) at 763.98
Hang Seng up +102.63 (+0.51%) at 20,066

US markets
S&P 500 up +9.98 (+0.71%) at 1,416
DJIA up +85.33 (+0.65%) at 13,250
Nasdaq up +31.46 (+1.04%) at 3,062

European markets
Eurofirst 300 up +3.63 (+0.33%) at 1,104
FTSE100 up +1.47 (+0.03%) at 5,835
CAC 40 up +31.29 (+0.91%) at 3,480
Dax up +49.49 (+0.71%) at 6,996

Currencies
€/$ 1.23 (1.24)
$/¥ 79.34 (79.32)
£/$ 1.57 (1.57)

Commodities ($)
Brent Crude (ICE) down -1.16 at 114.11
Light Crude (Nymex) down -0.51 at 95.09
100 Oz Gold (Comex) unchanged 0.00 at 1,616
Copper (Comex) unchanged 0.00 at 338.60

10-year government bond yields (%)
US 1.84
UK 1.69
Germany 1.53

CDS (closing levels)
Markit iTraxx SovX Western Europe -0.1bps at 240.91bp
Markit iTraxx Europe -0.43bps at 145.49bp
Markit iTraxx Xover +4.62bps at 584.51bp
Markit CDX IG -2.11bps at 101.07bp

Sources: FT, Bloomberg, Markit