Deutsche Bank

If you thought we'd seen the depths of NIRP, think again because as Deutsche Bank notes, the ECB, Riksbank, SNB, and Nationalbank will likely dive further into the monetary Twilight Zone in the months ahead. Only when rates become negative enough to spark a depositor revolt will we have reached the "real" lower bound, but at that point, it will be far too late...

A beleaguered Deutsche Bank is set to slash the investment bank bonus pool by some $566 million as John Cyran's effort to right a sinking ship continues. As Bloomberg reports, "no decision has been taken and the biggest reductions are likely to impact employees in the fixed-income business. Some managing directors may have their entire bonus scrapped, according to the person."

As always happens after shocking events like yesterday which "nobody could have possibly predicted", watching the Penguin gallery reel in its humiliation is absolutely worth the price of admission.

Tomorrow morning Mario Draghi is widely expected to if not announce an extension, or expansion, of the ECB's QE program, than to at least jawbone sufficiently, and push the EURUSD lower from its recently anchored level in the 1.10-1.20 range. But what are the specifics of Draghi's announcement: will he merely expand the monetization limit per security, as he did in early September, will he increase the universe of eligibile securities, or will he simply extend the maturity of the non-open ended QE from September 2016 to some indefinite date? The following list, courtesy of Bloomberg, summarizes what the sellside universe believes Draghi will unveil in just under 12 hours.

• Canada's Trudeau topples PM Harper in shock election win (Reuters)
• Where Canada’s Harper Hit Hurdles (WSJ)
• Pugnacious Trudeau Steps Out of Father's Shadow and Into Power (BBG)
• European Stocks Decline, Euro Rallies as ECB QE Optimism Fades (BBG)
• Valeant, Under Pressure About Price Increases, Plans Changes (WSJ)
• Syrian rebels say they receive more weapons for Aleppo battle (Reuters)

"Instead of processing a net value, the person processed a gross figure. This meant the trade had “too many zeroes”, said one of the people."

And as everyone knows, "too many zeroes", is the technical term for you royally fucked up.

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The LBMA wants to boost transparency and invited the market to suggest improvements including considering a new electronic platform that may lower trading costs and improve efficiency.

• Great News: China’s GDP Growth Beats Forecasts as Stimulus Supports Spending (BBG)
• Oh wait, maybe not: China GDP: Deflategate Comes to Beijing (WSJ)
• Actually, definitely not: Shanghai rebar falls to record low after weak China GDP (Reuters)
• But who cares: European Shares Gain on Earnings as Bonds Drop, Metals Decline (BBG)

The key overnight event was the much anticipated, goalseeked and completely fabricated Chinese economic data dump, which was both good and bad depending on who was asked: bad, in that at 6.9% it was below the government's 7.0% target and the lowest since Q1 2009, and thus hinting at "more stimulus" especially since industrial production (5.7%, Exp. 6.0%) and fixed spending also both missed; it was good because it beat expectations of 6.8% by the smallest possible increment, and set the tone for much of Europe's trading session, even if Asia shares ultimately closed largely in the red over skepticism over the authenticity of the GDP results. Worse, and confirming the global economy is now one massive circular reference, China accused the Fed's rate hike plans for slowing down its economy, which is ironic because the Fed accused China's economy for forcing it to delay its rate hike.

Moments ago, Europe's largest bank by assets and by gross notional derivatives, announced a raft of high-level management changes as part of an anticipated and sweeping restructuring of key divisions and senior-level committees. As WSJ reports, Colin Fan, the investment-banking co-head responsible for securities trading, will resign effective Monday. But the most profound change is that Deutsche Bank will split its investment bank into two pieces: one, focused on mergers and other deals, corporate finance and transaction banking services such as cash management, and the other on trading and global markets.

If you needed further evidence that global growth and trade are in a veritable tailspin, look no further than the latest trade data from India, which shows that both exports and imports fell by 25% in September. That's ok though, we're sure it's nothing another rate cut can't fix...

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As we have warned numerous times - and any trader old enough to have actually lived through a credit cycle can attest to - there is only so much releveraging shareholder-friendly exuberance firms can do before the company's balance sheet becomes questionable. That inflection point has come for US equities. The deterioration of balance-sheet health is "increasingly alarming" and will only worsen if earnings growth continues to stall amid a global economic slowdown, according to Goldman Sachs and JPMorgan's Eric Beinstein warns "the benefit of lower yields for corporate issuers is fading." The weakness is widespread as BlackRock fears "you’ll continue to see some land mines out there."

"The business environment deteriorated further in the third quarter. However, the cost reduction actions we took in previous quarters and the acceleration of our transformation program enabled us to protect our financial performance in what is shaping up to be the most severe downturn in the industry for decades.... In light of conservative customer budgets for next year, we are therefore entering another period during which we will continually adjust resources in line with activity, as the recovery now appears to be delayed."