Deutsche Bank

Euro Surges, Yields And Stocks Rise As Central Banks Deliver Coordinated Message

The euro soared to the highest level in over a year while bond yields and global shares also climbed, as an ongoing barrage of coordinated hawkish comments from central banks signaled the era of easy money might be coming to an end for more than just the United States. S&P futures were fractionally in the green following the best day for US equities in two months.

Frontrunning: June 27

  • Stocks, dollar ease as central bank officials take center stage (Reuters)
  • Euro surges on Draghi comments, dollar slips (Reuters)
  • Yuan Surges in Afternoon Trade Amid Talk PBOC Supported Currency (BBG)
  • U.S. threatens Syria, says Assad is planning chemical weapons attack (Reuters)
  • Google Gets Record $2.7 Billion EU Fine for Skewing Searches (BBG)

Frontrunning: June 26

  • Italian Bank Deal Raises Questions About Eurozone Rules (WSJ)
  • UK PM May strikes $1.3 billion deal to get Northern Irish DUP support for her government (Reuters)
  • Nestle Targeted by Dan Loeb in Activist’s Biggest-Ever Bet (BBG)
  • Nestle 'committed' to strategy as activist investor moves in (Reuters)
  • Troubled Air-Bag Maker Takata Files for Bankruptcy (WSJ)

McKinsey: Banks Will Have To Slash 30% Of Analyst Jobs To Comply With New Research Rules

"Two to three global banking players will preserve their status in the new era, winning the execution arms race and dominating trading in equities around the globe.  Over the coming five years, banks will need to make hard choices and play to their strengths. Not only will the top ranks be thinned out, there will be shakeouts in regional markets."

Key Events In The Coming Quiet Week: Brexit, Housing And Lots Of Fed Speakers

In an otherwise relatively quiet week in which the only upcoming US data is housing, current account and jobless claims, UK politics will again draw attention, one year (on Friday) after the Brexit referendum and as noted earlier, Brexit negotiations begin on Monday, despite lingering political uncertainty in the UK. Also no less than 9 FOMC members are scheduled to speak this week.

When Will The Fed Tighten Enough To Cause The Next Recession?

In trying to answer "When will the Fed tighten enough to cause the next recession", Deutsche Bank says that while current market expectations suggest the next recession (or at least the next Fed tightening that would be forceful enough to cause a recession) could still be many years away, the bank "thinks this is too optimistic." Here's why