Good morning. Here's what you need to know.
- Asian markets were mixed in overnight trading, with the Nikkei down 0.3 percent and the Shanghai Composite up 0.8 percent. Italy is leading most European stocks higher again today, up 0.9 percent. In the United States, Dow futures are up 7 points while S&P 500 futures are flat.
- Republicans countered the White House's fiscal cliff offer on Tuesday with a plan of their own, calling for an $800 billion increase in tax revenues and a $1.2 trillion reduction in spending. The move is seen as strengthening the Republicans' position to the extent that they are now perceived as willing to compromise and begin negotiations from a middle ground.
- President Obama will give his first interview today (on Bloomberg TV at 12:30 PM ET) since being re-elected to the presidency a month ago. The focus will be the fiscal cliff, and viewers may get a chance to see a response to the new plan Republicans introduced yesterday.
- The yield on Italian 10-year sovereign bonds hit its lowest level in 2 years this morning as turmoil in eurozone government debt markets continues to abate. Yesterday, the spread between Italian and German 10-year yields fell below 300 basis points, and Italian Prime Minister Mario Monti said he would like to see that spread reduced to 287 bps, or half of what it was when he first took office.
- The Reserve Bank of Australia cut its key benchmark interest rate to 3.00 percent from 3.25 percent, in line with the consensus estimate. The cut brings the rate to its lowest level since April 2009 and reflects the central bank's concerns over a weakening economy.
- Eurozone producer prices rose 2.6 percent from a year ago, slightly ahead of expectations of a 2.5 percent increase but lower than last month's 2.7 percent rise, indicating slowing inflationary pressures in the euro area. The data may support the case for a rate cut at the European Central Bank's monthly policy meeting later this week, which many Wall Street economists expect is in the cards.
- The Bank of Canada announced today it would leave its benchmark interest rate unchanged at 1.00 percent, in line with expectations. Today's meeting marks the first since BoC Governor Mark Carney was selected to head the Bank of England.
- EU finance ministers meet in Brussels today to discuss banking reform after the EU announced yesterday that the bloc would, like the United States, miss the January 2013 deadline for implementing new rules on capital requirements designed to shore up the banking system.
- Iran claimed Tuesday that it captured a U.S. drone that entered Iranian airspace over the Persian Gulf. While the U.S. denied any drones were missing, Iran released video footage of Iranian Revolutionary Guard members inspecting a drone like the one they claim to have captured. If true, the drone would be the third taken from the U.S. by Iran and could serve to increase tensions between the two nations.
- The ISM New York Report on Business is released at 9:45 AM ET. This month's release will be the first to factor in the effects of Hurricane Sandy on NYC business activity. At 10:45 AM ET, Federal Reserve Governor Daniel Tarullo will give a talk on financial regulation at the Brookings Institution. Follow the releases on Money Game >
- BONUS: Kim Kardashian enjoyed a milkshake while on a trip in Bahrain.
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