Credit Suisse agreed to pay $5.28 billion to resolve a U.S. investigation into its business in mortgage-backed securities as officials work through a backlog of crisis-era bank cases. The Swiss lender will pay a $2.48 billion civil penalty and $2.8 billion in relief for homeowners and communities hit by the collapse in home prices, it said in a statement Friday.
The market was waiting for the DOJ to announce the long-awaited settlement with Deutsche Bank today. Instead, it got news of a surprise lawsuit filed by the DOJ which sued Barclays after failing to settle a long-running probe into the UK bank's involvement in pre-crisis mortgage fraud.
According to Credit Suisse, pension funds that rebalance monthly and quarterly would need to sell $38BN in US stocks in coming days to rebalance to prior asset allocation levels, adding the "estimated rotation out of domestic U.S. equities would be one of the largest on record."
Italy's cabinet will meet later on Monday to authorise an increase to the national debt to cover the cost of saving Monte dei Paschi di Siena and other ailing banks, government sources said cited by Reuters.
Deutsche Bank shares are sliding this morning after headlines from CNBC reporting a settlement is close (as soon as Wednesday) with the US Justice Department over mortgage fraud. With analyst expectations/hopes in the $2 to $5 billion range (against the initial $14 billion fine), reports say the bank is set to pay "less than $14 billion" which has perhaps spooked investors with its uncertainty.
On Thursday, December 1st, Yasmin Seweid was allegedly assaulted by Trump supporters in NYC. Both Tamerra Griffin and Ben Kochman, the authors for BuzzFeed and the New York Daily News stories, did not include any additional sources for their story, other than Seweid’s personal account and a statement from police that the “investigation was ongoing” with no further comment. Saweid was arrested on Dec. 14 for filing a false police report and obstructing government administration.
When it comes to today's Fed decision, there is little doubt: a 25 bps rate hike, the first in 2016 and only the second since the financial crisis, is now assured: all 103 Bloomberg-surveyed economists expect a 25bp increase, and the market agrees pricing in a 100% probability of a rate hike. So what does matter? Here is a selection of sellside opinions, summarizing they key things to watch for in today's FOMC statement.
Last Wednesday’s order sparked a frenzy of superfast trading as other market participants piled in and a total of $3.4 billion worth of E-minis changed hands within two seconds. Here is a "deep dive" look into what happened.
In a quiet start to the week, European, and Asian stocks fell with S&P futures fractionally in the red, as Chinese markets tumbled the most since June and crude oil surged, even as the Nikkei erased all losses for 2016 on continued weakness in the Yen.
Global stocks extended the longest winning streak since September, with Asia up 0.8% and Europe rising 0.7% while bonds and credit markets strengthened amid hopes that the European Central Bank will prolong quantitative easing, while optimism an Italian bailout of Monte Paschi will prevent European bank contagion, has pushed European financial stocks higher. US equity futures were little changed.
"Has monetary policy robbed savers to pay borrowers? Has the MPC been Robin Hood in reverse? In a word, no." said BOE governor Mark Carney, which was surprising because in a study earlier this year, the BIS found that monetary policy has done precisely that.
After soaring over 15% in the post-Trump period, Caterpillar shares are halted this morning ahead of a presentation at Credit Suisse Annual Industrial Conference. The presentation shows cost cuts, layoffs, and admits that 2017 consensus estimates are "too optimistic."