"If the great Marty Zweig taught us all decades ago never to fight the Fed, then we are to learn today never to fight the collective force of the central banks in aggregate either, but should instead see this as a wind at the stock market’s collective back."
Sterling gold rose 1.3% today as sterling slumped again after the UK set a March deadline to start their 'Brexit divorce' proceedings from the European Union and on deepening nervousness regarding a 'Hard Brexit'.
The German parliament’s economics committee chairman Peter Ramsauer, in an interview with Welt am Sonntag, said the move against Deutsche "has the characteristics of an economic war", adding that the US had a "long tradition" of using every available opportunity to wage what amounted to trade war "if it benefits their own economy", and the "extortionate damages claims" being made in the case of Deutsche Bank were an example of that.
With China, German and South Korea closed for holiday, it has been a relatively quiet day in overnight equity trading, especially in the one stock everyone is keeping a close eye on, Deutsche Bank, whose ADRs are trading fractionally lower, down under 1% in premarket trading. Cable plunged on "Hard Brexit" fears sending the FTSE100 to fresh 16 month highs.
Having traded in a narrow range for 3 months, Swiss stocks tumbled last week amid contagion concerns over Deutsche Bank. With valuations at their highest realtive to Euro peers since 2008, it appears investors are hedging aggressively. Bearish Swiss stock option positions out-number bullish by the most since Lehman (after which SMI fell by 50%).
Deutsche Bank suffered a further blow to its image over the weekend with a third alleged "IT outage" in the space of a few months on Saturday, that prevented some customers getting access to their money for a short time: "Customers can not access their cash because it is blocked", a customer complained to Germany's Handelsblatt.
Deutsche Bank AG ’s talks with the U.S. Justice Department to settle a high-profile set of mortgage-securities cases are continuing, with no deal yet presented to senior decision makers for approval on either side, the WSJ reports as Germany's econ Minister Gabriel accused DB of blaming speculators for last week's plunge in its share price.
"So for what it’s worth however the ECB decides to navigate their latest challenge we are less inclined to embrace the classic financial sector meltdown led risk off trade that forces core rates significantly lower. Or at least it would need a spectacular display of policy incompetence first. (On second thoughts..?!)"
Deutsche Bank executives are heading to the United States in the coming days to negotiate a settlement over a fine of up to $14 billion for misselling mortgage-backed securities, the Frankfurter Allegemeine Zeitung reported. This means that Friday's rumor presenting the settlement renegotiation between DB and the DOJ as a done deal, was the latest unsubstantiated media hoax meant to push risk assets higher.