Citigroup

Global Stocks Tumble, US Futures Slide On Deutsche Bank Fears, Central Bank And Commodity Concerns

While today's biggest event for both markets and politics will be tonight's highly anticipated first presidential debate between Trump and Hillary, markets are waking up to some early turmoil in both Asia and Europe, with declines in banks and energy producers dragging down stock-markets around the world, pushing investors to once again seek the safety of government bonds and the yen.

The Status Quo vs. Donald Trump

"...the corrupt status quo of both useless political parties are making a huge calculated error by coming together so publicly against Trump. By rallying so aggressively and passionately around Hillary Clinton, the worst of the worst from America’s oligarchy have succeeded in the impossible. They have made a billionaire reality tv star look like a counter culture iconoclast."

What Wall Street Expects From The ECB, And How Will The Market React

With the ECB running dangerously low on bonds to monetize even as its QE program has failed to spur inflation, Mario Draghi may have no choice but to unveil drastic changes to the central bank's QE programm tomorrow. Here are the options available to the central banker, and some ideas of how markets may react.

Bank of America "Thinks The Unthinkable"

"The unthinkable: BB yields about to become negative. Such has been Draghi’s influence across the whole credit market that we are close to seeing our first negative yielding BB-rated bond. But if debt costs for speculative grade companies become “inverted”, then the economics of LBOs will be transformed, and the quality of the assets they are buying will become secondary. We see a growing risk that another private equity cycle emerges in Europe."

Putin Joins "OPEC Headline" Fray, Pushes For Oil Production Freeze, Iran Exemption

Overnight the debate over the fate of the OPEC oil production got a new and unexpected entrant when Russian president, Vladimir Putin said he’d like OPEC and Russia to reach a deal to freeze supply and expects the dispute over Iran’s participation can be resolved. Putin sided with Iran saying that oil producers recognize that the middle-eastern nation, which has mostly restored the output halted during three years of trade restrictions, deserves to complete its return to world markets

The First Victims Of The Libor Surge Have Emerged... In Japan

So far US banks have escaped the recent Libor surge, but the higher funding costs and shrunken market are hitting Japanese banks particularly hard, as they have been sourcing as much as a third of their U.S. dollar liquidity in the short-term U.S. market. Japanese banks have about $125 billion to $150 billion of CP and CDs maturing before the end of September.

CLSA: "The Bank Of Japan Has Nationalized The Japanese Stock Market"

The Bank of Japan's near doubling of its purchases of Tokyo shares is causing investors to worry the central bank will dominate financial markets, which could lead to price distortions as it continues to grease the economy. It also prompted a CLSA analyst to tell the truth: "The BOJ is nationalizing the stock market."

US Futures Fall, European Stocks Rise As Stronger Dollar Sends Oil Lower

European stocks rose and US S&P futures fell after the dollar strengthened following the latest hawkish comments from Fed vice-chair Stanley Fischer signalled that a 2016 rate hike is still being considered and again boosted speculation that US rates will rise this year. The rising dollar pressured commodities and notably oil, which dropped 2% breaking a 7 days stretch of increases; emerging markets retreated. 

S&P Futures Unchanged As Europe Rises; Dollar Slide Sends Oil Above $47

In the latest quiet trading session, European shares rose while Asian stocks fell and S&P futures were little changed. Minutes of the Fed’s last meeting damped prospects for a U.S. interest-rate hike, sending the Bloomberg Dollar Spot Index doen 0.3%, approaching a three-month low. Dollar weakness continues to buoy commodities, with the Bloomberg Commodity Index set for the most enduring rally in more than two months, as WTI flirted with $47