New York morning espresso

** FT News **

* US military advisers arrive in Baghdad | Troops begin to assess the Iraqi forces facing Isis militants and establish a joint operations command centre in the capital

* Kurdish crude hits the oil market | The move by the Kurdistan regional government to sell oil out of the semi-autonomous region of Iraq angers Baghdad which vows to prosecute buyers

* Argentine CDS slumps below Puerto Rico | Cost of insuring against an Argentine debt default tumbles to its lowest since January 2013

* Etihad takes 49% stake in Alitalia | Deal gives Alitalia a financial boost and broadens the Gulf airline’s ambitious plans for a new global alliance in Europe and the Asia-Pacific region

* US considers further Russian sanctions | Sanctions would curb exports of energy technology and face opposition from many European nations and US business fearing a competitive disadvantage

* Ambani’s RCom raises $796m via share issue | Successful sale by the indebted telecommunications group may tempt other capital-starved Indian industrial groups to raise funds

* Vanke makes strong debut in Hong Kong | Chinese property developer is third company to perform such a transfer to Hong Kong, which does not involve raising any fresh capital from investors

* Russian stocks stage remarkable turnround | Over the past three months, Russia’s RTS index is the third best-performing exchange worldwide, gaining 25 per cent from its mid-March lows

* Carmakers rev up Indonesia discounts | Carmakers in one of the world’s hottest emerging markets forced to offer unprecedented discounts as competition heats up following production expansion

* China expands plans for World Bank rival | Beijing courts Asian and Middle Eastern states to develop competition for global bodies it believes are too influenced by the US and its allies

* Dubai stock market suffers heavy tumble | Much of the decline was attributed to the travails of Arabtec, the country’s largest listed construction company and its most heavily traded shares

* Vintage year for investors despite unrest | Even in frontier markets, those who diversified made money: the MSCI Frontier Markets index has returned 21 per cent so far this year

* Singapore joins clampdown on bank liquidity | Banks will be required to have enough cash and easy-to-sell assets in hand to allow them to survive a short-term market crisis

* Turkey’s central bank cuts rates to 8.75% | The central bank in Turkey has cut interest rates by a more than expected 75 basis points to 8.75%, following sustained pressure from the government

** FT Opinion **

- Defend Argentina from the vultures | A creditor paid more to take on the risk of a default cannot then be surprised by it

- A conspiracy that saps Poland’s strength | The case against Russia is far from proved – it is not the KGB style to bug restaurants and send the tapes to a magazine

- Beijing will run London’s renminbi trade | A premature opening of the capital account could unleash damaging financial flows and undermine stability

** BB recent & required reading **

- Psychometrics help ease the huge EM funding gap | How do you bank the “unbankable”? The question could hardly be of more importance to small businesses in emerging markets, an estimated 200m of which are starved of the finance they need to grow. One somewhat unlikely – but increasingly popular – answer is through psychometric tests.

- Lala gets a taste for Brazilian dairy | Grupo Lala, which controls about half of Mexico’s dairy market, has been running a World Cup promotion to give consumers the chance to win tickets to Brazil. Now, it seems, it could have been eyeing Latin America’s biggest market itself. According to Bloomberg, Lala is keen to buy BRF’s (Brazil Food) dairy business in Brazil, which the company has reportedly been hawking to potential buyers.

- The fragile five: back again? | Is it the return of the fragile five? The currencies of Indonesia, Turkey, South Africa and India were the worst performing of the world’s 31 major currencies in the month according to Bloomberg, while that of Brazil – the fifth of the fragile five identified by Morgan Stanley last August at the height of the Fed-inspired taper tantrum – is roughly where it started the month after three months of gains.

- Turkish interest rates: what is going on? | What is going on with Turkey’s central bank? Why, more specifically, has it just cut its benchmark interest rate by 75 basis points to 8.75 per cent when the latest figures showed inflation just shy of 10 per cent? And why did it do that in the wake of a previous 50 basis point cut in May? According to the bank’s version of events, inflation is no longer so much of a concern, because of Turkey’s mixture of increased exports, slower domestic demand and a stabilised currency.

** From elsewhere **

The Chinese government has much less control over its currency than most people think it does (Quartz)

Lagarde’s apology is misplaced (Business Day)

** Markets: mostly down **

Emerging Markets
MSCI Emerging Market Index down -0.49% at 1,043

FTSE down -0.65% at 6,743
RTS down -1.45% at 1,401
Warsaw Wig down -0.63% at 52,536
FTSE 300 Eurotop down -0.70% at 1,377

DJIA down -0.70% at 16,818
S&P 500 down -0.64% at 1,950
Bovespa up +0.13% at 54,281

Nikkei 225 down -0.71% at 15,267
Topix down -0.60% at 1,261
Hang Seng down -0.06% at 22,867
Shanghai Composite down -0.41% at 2,026
MSCI Asia ex-Japan down -0.28% at 488.95
CNX Nifty down -0.14% at 7,569

€/$ 1.36 (1.36)
$/¥ 101.91 (101.97)

Brent Crude (ICE) down -0.55 at 113.91
Light Crude (Nymex) up +0.59 at 106.62
100 Oz Gold (Comex) down -8.90 at 1,312