G3 Recap 4-11-11

Main Items:

  • There are signs that China is sitting on large amount of previously unreported copper inventories – this shadow inventory may total 1M tons, or 15% of China’s annual consumption. WSJ
  • European officials have ruled out giving Portugal an interim bailout to bridge the country through June and will instead start negotiating a full cross-party deal now. There is speculation that the ECB leaned on Portuguese banks to cut off lending to the government in order to force it into seeking a bailout
  • The UK bank report was published this morning and it was slightly less restrictive than expected. The top banks will have to ringfence their retail operations from riskier IB activities. Banks will be forced to hold core tier-1 capital equal to 10% (most are already at this level). Lloyds could be forced to divest more branches. The banking sector in the UK is outperforming.
  • Japan is widening the evacuation zone around Daiichi. Officials have decided to evacuate all or part of five towns and villages outside the current 20-kilometer evacuation zone around the stricken Fukushima Daiichi nuclear plant.

Overseas:

  • Chinese Trade Balance was 0.14bn in March vs -3.35bn expected and -7.3bn previously. Both Exports and Imports jumped sharply after the Chinese New year.

Commentary:

  • None
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