Deutsche Bank

"Barring disaster, this makes December liftoff a lock. It won’t stop the FOMC from being very dovish sounding and reiterating the commitment to a very slow path, as Evans did on TV a few minutes ago. The question is whether the market believes them if the numbers keep coming in on the strong side."

The USDollar Index is soaring (hitting its highest since early April and approaching 2015 highs) as the probability of a December rate hike hits 74%. This is not unequivocally good for a large number of American firms..

"We are expecting that to happen. It would be normal, and that would not indicate poor macroeconomic performance.”

"Before September we'd only ever seen negative 10y swap spreads for a period in 2010 although they did turn negative intra-day 3-years ago. It’s not quite up there with the flash rally/crash in Treasuries 13 months ago but it’s a very strange occurrence and one to watch and likely another product of regulation and liquidity."

• BOE Stays Cautious on Rate-Hike Timing as Inflation Outlook Cut (BBG)
• China Enters Bull Market (WSJ)
• Britain says Islamic State likely brought down Russian plane (Reuters)
• Dollar jumps as markets fix on December rate expectations (Reuters)
• Activist Investor Bill Ackman Plays Defense (WSJ)
• BOJ Survey Data Reveals Signs of Growing Inequality in Japan (BBG)
• UAW Warns of General Motors Strike If Workers Fail to Approve Contract (WSJ)

The story behind Malaysia PM Najib Razak's Goldman-backed slush fund just got even stranger as it now appears some $2.3 billion in mystery money tied to an ill-fated investment with the Saudis ended up being managed by an Australian penny stock pusher via a shady Cayman Islands account. 

There's a long way to go for the Saudis and the UAE to get back into the black and indeed, even Qatar is now set to post red ink...

When Saudi Arabia moved to Plaxico themselves last November by killing the petrodollar in an effort to bankrupt the US shale space and tighten the screws on Moscow, Riyadh set in motion a series of events that culminted in a 20% fiscal deficit and, most recently, an S&P downgrade. Now, the kingdom is not only running out of money, but water and food as well.

"During the busy reporting weeks, upgrades rise relative to downgrades only for this to reverse during ‘quiet’ periods when companies revert to guiding numbers back down again. Why is this important? History shows that during the busiest reporting weeks the S&P 500 has risen 60% of the time versus less than 50% during the quietest weeks. The simple message is this: don’t be short during US reporting seasons."

• World stocks on course for best month in four years (Reuters)
• Global Stocks Up Amid Stimulus Hopes (WSJ)
• BOJ Refrains From Adding Stimulus Even as Inflation, Growth Wane (BBG)
• U.S. Avoids Debt Default as Congress Passes Fiscal Plan (BBG)
• China naval chief says minor incident could spark war in South China Sea (Reuters)
• Exclusive Club: No High-Frequency Traders Allowed at Luminex (WSJ)

A bursting of property bubbles in London and New York would be expected to have an impact on national economies and indeed on national property markets. Sentiment would be badly impacted. Caution should be the order of the day.

As tipped earlier this month, Deutsche Bank just turned in a Q3 loss of €6 billion as a raft of writedowns hit the bottom line. The bank also announced more details of "Strategy 2020", which include layoffs and a corporate rethink that will see Europe's largest bank exit a multitude of markets. 

• Fed puts December rate hike firmly on the agenda (Reuters)
• Charting the Markets: A More Hawkish Fed Rattles Investors (BBG)
• China to modernize and improve fiscal and tax systems (Reuters)
• Deutsche Bank to Cut 35,000 Jobs in Overhaul (WSJ)
• Deutsche Bank Said to Near $200 Million Sanctions Settlement (BBG)
• Barclays profits drop as it abandons cost-cutting targets (FT)

Based on the overnight market prints which are an oddly reddish shade of green, it took algos about 12 hours to realize that the reason they soared for most of October, namely hopes of an easier Fed which were launched with the terrible September jobs report and continued with increasingly worse US economic report in the past month, can not be the same reason they also soared yesterday after the announcement of a more hawkish than expected Fed statement which envisioned a stronger US economy and a removal of foreign considerations, which even more curiously took place on even worse data than the Fed's far more dovish September statement.

Deutsche Bank is going through a painful restructuring that began with the ouster of co-CEOs Anshu Jain and Jürgen Fitschen and culminated in new CEO John Cryan’s move to eliminate a quarter of the workforce, or some 23,000 people. Well don’t look now, but just moments ago, Europe’s biggest bank eliminated the dividend.