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Frontrunning: March 19

  • Fed May Not Hit Neutral Until 10th Anniversary of Lehman Collapse (BBG)... make that never
  • Global stocks and bonds roar Fed approval, dollar fights back (Reuters)
  • EU to tell Greece time, patience running out (Reuters)
  • U.S. likely to delay planned closure of two Afghanistan bases (Reuters)
  • Norway Signals Reduction After Unexpectedly Holding Rate (BBG)
  • Oil Falls to $55 as Kuwait Comments Refocus on Oversupply (Reuters)
  • Tsipras Heads to Summit as Merkel Tries to Defuse Greek Crisis (BBG)
  • Yahoo Pulls the Plug on China Operations (WSJ)
  • Democratic support for Hillary Clinton softens: Reuters/Ipsos poll (Reuters)
  • Apple Sachs? Other way around: Never Mind Apple, It’s the Goldman Sachs Era in Dow Industrials (BBG)
  • Investors Raise Alarm Over Liquidity Shortage (WSJ)... just two years after Zero Hedge
  • Falling Crime Rates Make Dangerous Neighborhoods Safe for Bidding Wars (BBG)
  • U.S. rebukes Israel's victorious Netanyahu on Mideast policy (Reuters)
  • Microsoft tackles China piracy with free upgrade to Windows 10 (Reuters)
  • Two more U.S. healthcare workers repatriated for Ebola monitoring (Reuters)

 

Overnight Press Digest

WSJ

* The U.S. economy will be better positioned for the next recession if interest rates are higher when the downturn starts - yet the best way to achieve that may be to keep rates lower now. (http://on.wsj.com/1AHYfaD)

* The Federal Reserve opened a door to raising short-term rates by midyear but offered several reasons it is still in no great rush to act. It said it would move when it is reasonably confident low inflation is on track to return to its 2 percent target. (http://on.wsj.com/1BY3PcR)

* Despite changing consumer tastes, Coca-Cola CEO Muhtar Kent is pushing a strategy to sell more cola. The 62-year-old CEO says he has a number of plans such as increased marketing spending and an overhaul of the company's U.S. distribution network that will help Coke return to high-single-digit earnings growth in 2016. (http://on.wsj.com/1H3SP0R)

* Gunmen stormed a museum in Tunisia's capital on Wednesday, leaving 20 people dead, including 18 foreign tourists, after failing to launch an assault on the national assembly as lawmakers debated an antiterrorism bill. (http://on.wsj.com/1FGxNDB)

* Jana Partners sold a 20 percent stake in its firm to a Neuberger Berman business, the latest sign that the broader investing world is embracing activism. (http://on.wsj.com/1DBKeRU)

* New details about the controversial sale of a house to Mexican Finance Minister Luis Videgaray show the seller didn't make a profit, undermining Videgaray's suggestion that the deal was done out of commercial interest. (http://on.wsj.com/1MPJbxk)

* New tax transparency requirements between multinational corporations and European governments may be broadened further this year to encompass public disclosure of the companies' tax arrangements in Europe. The requirement for public disclosures would go further than a draft bill approved by the European Commission on Wednesday. (http://on.wsj.com/1bgeNk9)

* General Motors Co is closing its plant in Russia and stopping sale of many of its products in that market, a strategic shift aimed at meeting European profit targets and devoting capital to ventures that carry less risk. (http://on.wsj.com/1Ex7tKo)

 

FT

Holcim board on Wednesday met with French rival Lafarge seeking to save their 40 billion euro ($43.31 billion) merger deal. Heated discussions between the two companies continued over who would lead the combined company, people familiar with the matter said.

Germany has banned a nationwide service of Uber's online ride-hailing service UberPop on Wednesday declaring the use of unlicensed cab drivers and said Uber will face fines up to 250,000 euros each time it operates the service in the country.

General Motors will pull the plug on European Opel brand ride from Russia and shut its St Petersburg plant, in a move to cut losses in the crisis-hit country. Declining oil prices and pressure from western sanctions have weighed on sales in Russia and prompted a 38 percent fall in local registrations last month.

 

NYT

* General Motors on Wednesday announced plans to largely withdraw from the Russian market by the end of the year, becoming the most prominent company to date to express a lack of confidence in the deeply troubled economy. (http://nyti.ms/1MPKlZB)

* Sony Corp introduced its PlayStation Vue web-based streaming TV service on Wednesday. The service offers a bundle of channels along with a personalized, searchable approach to watching live and on-demand television. (http://nyti.ms/19zI2ho)

* The Federal Reserve on Wednesday moved to the verge of raising interest rates for the first time since the economy fell into recession more than seven years ago, even as officials suggested that the Fed might not pull the trigger until well into the second half of the year. (http://nyti.ms/1I0Pqxr)

* U.S. President Barack Obama on Wednesday denounced the Republicans' latest budget as stingy and shortsighted, taking them to task for proposing to cut domestic programs that he said would yield more jobs and economic benefits for working people who are struggling financially. (http://nyti.ms/1B35Gby)

 

Hong Kong

SOUTH CHINA MORNING POST

-- Shoppers and tourists flocked to Chanel stores in Hong Kong as the luxury brand slashed prices of classic bags by almost 20 percent. Chanel began cutting prices in Hong Kong on Wednesday after announcing it would realign prices from April 8 on three of its most well-known handbags. (http://bit.ly/1Lwq7bX)

-- Customs officers arrested 5,000 people - almost two-thirds of whom were mainlanders - in the past year for taking more than the allowed amount of baby formula across the border, new figures showed. Statistics presented to the Legislative Council also showed that most offenders were fined with only 157 people being jailed for between one and 140 days. (http://bit.ly/1EwV9d7)

-- A Hong Kong tribunal started a preliminary hearing on Wednesday involving the head of U.S. short-seller Citron Research over allegations that it published a "false and misleading" report about China's fourth-biggest developer, Evergrande Real Estate Group, in 2012. (http://bit.ly/18JuMWo)

THE STANDARD

-- Cathay Pacific bosses have welcomed the approval of the three-runway system in Hong Kong, but say the users-pay plan may need some tweaking. Chairman John Slosar said he believes the planned HK$180 fee for departing passengers would be too much of a burden. (http://bit.ly/193Gj2B)

-- The Hong Kong and China Gas Company has proposed one new bonus share for every 10 existing shares, a tradition over the past five years. Its core profit last year rose 10 percent to HK$7 billion amid buoyant growth in China's gas business. (http://bit.ly/1F61O0E)

HONG KONG ECONOMIC TIMES

-- Bank of East Asia raised HK$6.59 billion ($849.62 million) by selling 223 million new shares at HK$29.5576 each to Sumitomo Mitsui Banking Corp, making the Japanese group the single-largest shareholder of the Hong Kong-listed bank with a 17.5 percent stake.

 

Canada

THE GLOBE AND MAIL

** U.S. discounter Target Corp will reap some benefits from its troubled foray into Canada that has left angry creditors with hundreds of millions of dollars of debts. The retailer, whose Canadian division filed for bankruptcy protection on Jan. 15, will collect a $1.6 billion tax break in the United States as a result of its move to retreat from this country, according to a new filing. (http://bit.ly/1CwmwVN)

** The University of Toronto has reached a tentative agreement with its 6,000 teaching assistants, that if approved, comes just in time for the rush of essays and exams at the end of term. Terms of the University of Toronto agreement will not be released until union members have seen and voted on its details. (http://bit.ly/1MMDRMU)

** Tribute to Liberty, the charity behind the campaign to erect a monument to the victims of communism has declared zero political activity in its five-year history, even though it originally told the Canada Revenue Agency some of its work would be political. (http://bit.ly/1FE2w4n)

NATIONAL POST

** A tough week in the Canadian oil patch continued on Wednesday, as ConocoPhillips Co became the latest in a string of oil companies to lay off staff. The Houston-based energy major trimmed its Canadian headcount by 7 percent or about 200 employees. (http://bit.ly/1Gtd2d9)

** Prime Minister Stephen Harper struck back on Wednesday at critics of his firearms policy, saying it's "patently ridiculous" to suggest his recent remarks on gun ownership will lead to vigilantism. Harper had stressed that Canada's "moderate" system of gun regulation is far removed from the much more open approach to gun ownership in the United States.(http://bit.ly/1BQvTxA)

** Prime Minister Stephen Harper says his government next week will table a proposal for an "extension and expansion" of the mission in Iraq against the Islamic State, and didn't rule out going into neighbouring Syria. (http://bit.ly/1B0hVpq)

 

Britain

The Times

RENTOKIL SPRINGS ITS TRAPS FOR GLOBAL GROWTH

Britain's best-known rat catcher, Rentokil Initial Plc , is about to expand its empire with two acquisitions, including one that will mark its entry into Central America. Rentokil will confirm that it has bought Sagrip in Latin America and Eradico Services in Detroit, Michigan.(http://thetim.es/1B1R0JP)

ZARA GOES FOR SIZE AS FAST FASHIONS BOOM

Spain's Zara fashion chain will close some smaller outlets in favour of large stores in prime locations as part of a strategy against online outlets.(http://thetim.es/1bgkzlE)

The Guardian

SWISS AUTHORITIES FREEZE BANK ASSETS AS PART OF PETROBRAS INVESTIGATION

Authorities in Switzerland have frozen assets worth $400 million as part of an investigation into alleged links between Swiss accounts and a sprawling corruption scandal in Brazil embroiling senior politicians and the state-owned oil company, Petrobras.(http://bit.ly/1B2cTZk)

OSBORNE TARGETS MULTINATIONALS AND TAX EVADERS IN BUDGET CRACKDOWN

Government measures to tackle tax evasion and avoidance will raise 3.1 billion pounds ($4.63 billion) for the public purse over the next five years, George Osborne said. (http://bit.ly/1bglrXI)

The Telegraph

ECB BESIEGED BY PROTESTS AS DRAGHI CELEBRATES $1.4BN TOWER

Frankfurt, the euro area's financial capital and home of the common currency, is bracing for demonstrations and sit-ins at locations throughout the city by anti-austerity groups and organizations sympathizing with the plight of Greece.(http://bit.ly/1wZ9VJD)

Sky News

FED SIGNALS MOVE TO INCREASE INTEREST RATE

The Federal Reserve has opened the door for an interest rate increase as early as June, although a later hike appears more likely after it downgraded the expected pace of growth and inflation. (http://bit.ly/1bglzXc)

EX-HSBC CEO: 'CAPITALISM REMAINS IN THE DOCK'

Capitalism and the financial system that underpins it remain "in the dock" in the wake of the banking crisis, yet there remain no credible alternatives to them, the former head of HSBC Holdings Plc, Lord Green, has said.(http://bit.ly/1bglSkA)

The Independent

BITCOIN: GOVERNMENT TO REGULATE CRYPTOCURRENCY TO AVOID MONEY LAUNDERING, SAYS TREASURY

The government is to regulate bitcoin exchanges to stop their use as money laundering hubs, the Treasury said.(http://ind.pn/1bgmjvd)