Capital Markets

Deutsche Bank Pays $60 Million To Settle Gold-Manipulation Lawsuit

Two months after paying $38 million to settle a silver price-fixing case, on Friday Deutsche Bank agreed to pay $60 million to settle private U.S. antitrust litigation by traders and other investors who accused the German bank of conspiring to manipulate gold prices at their expense.

"Metals Traders On Red Alert" - Chinese Commodity Bubble 2.0 Just Imploded

Industrial metals commodity prices plunged by the most since March in the last 2 days as China’s exchanges (once again) clamped down on speculation by tightening trading rules. As Bloomberg reports, for the second time this year, trading has exploded on the nation’s exchanges, pushing prices of everything from zinc to coal to multi-year highs and sending authorities scrambling to deflate the bubble before it bursts.

China Liquidity Crisis Deepens, Spreads Across Asia

Having exposed the deepening liquidity crisis in China previously, tonight's action across AsiaPac money-markets suggests - despite US equity record highs - all is very much not well below the surface of the global financial system. Short-term China repo rates have exploded to 20-month highs, Hong Kong Dollar money-market rates have jumped to the highest since May 2009, and Yen basis swaps are showing the most extreme demand for dollars since Lehman...

Brexit Redux: ECB Ready To Buy More Italian Bonds If Referendum "Rocks Markets"

In a report confirming that the ECB is preparing for a rerun of a post-Brexit scenario, Reuters writes that the ECB is ready to temporarily step up purchases of Italian government bonds if the result of next Sunday's crucial referendum "rocks markets" and sharply drives up borrowing costs for the euro zone's largest debtor. BTP futures briefly spike higher, gaining ~30 ticks in 2 minutes, to session high of 135.46 following the news.

How Far Can Bond Yields Rise Before Hurting Equities? Goldman Answers

"... we believe that the equity market is still at a level that can cope with moderately rising bond yields. We estimate that a rise in US bond yields above 2.75% or probably between 0.75-1% in Germany would create a more serious problem for equity markets: at that point we would expect that any further rises in yields from there would be a negative for stock returns." - Goldman Sachs

Dow Futures Top 19,100 As Machines Ramp Despite US Market Holiday

Don't let the fact that US equity markets are closed hold back the exuberant melt-up that a Trump victory has unleahed in capital markets. Echoing a normal non-holiday trading day, 0930ET came around and US equity futures kneejerk ramped higher, pushing Dow futures up above 19,100...

Frontrunning: November 18

  • Dollar heads for best fortnight vs. yen since 1988 (Reuters)
  • Jeff Sessions Said to Be Trump’s Pick for Attorney General (BBG)
  • Flynn set to be national security adviser (Reuters)
  • NATO Secretary General Expects to Speak With Trump ‘Very Soon’ (BBG)
  • Hensarling Could Be Wall Street’s Best Hope or Worst Nightmare (BBG)

Frontrunning: November 17

  • Dollar halts charge as bashed bonds steady (Reuters)
  • BOJ Fires Warning at Bond Market With Unlimited Buying Plan (BBG)
  • Trump Flouts Traditions Heading Into an Office Defined by Them (BBG)
  • Mr. Hedge Fund Goes to Washington, Looking for Ally in Trump (BBG)
  • Donald Trump’s Son-in-Law, Jared Kushner, Could Get Key White House Role (WSJ)