Politics will continue to be in focus as US elections draw closer, with attention on post-debate polling numbers high. However, this week should see a pivot toward data with markets looking for evidence of the summer wobble in activity data reversing. In the US the main focus will be the NFP and ISM reports.
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.
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.
One day after Deutsche Bank stock soared from all time lows, on the back of what so far appears to have been a fabricated report sourced by AFP which relied on Twitter to "inform it" that the DOJ would reduce its RMBS settlement with the German Lender, today Bloomberg reported that Deutsche Bank and six of its managers were charged in Milan for colluding to falsify the accounts of Italy’s third-biggest bank and manipulate the market.
Pundits have declared a “New Cold War.” If only! The Cold War was a time when leaders focused on reducing tensions between nuclear powers. What we have today is much more dangerous: Washington’s reckless and irresponsible aggression toward the other major nuclear powers, Russia and China.
"In our opinion it is not so much funding issues but rather derivatives exposures that more likely to trouble markets going forward if Deutsche Bank concerns continue. This is especially true if these concerns propagate into a confidence crisis inducing more rapid unwinding of derivative contracts."
Can fear of Trump motivate? Sure it can. But if Brexit taught us anything, it’s the limitations of a fear-based campaign, at least when the fear-mongers are the same smarter-than-thou elites who tsk-tsk their deep and abiding concern for the benighted masses from Davos or Jackson Hole. Status quo candidates don’t win on fear alone.
Angela Merkel cannot afford to bail out Deutsche Bank given the hard line Berlin has taken against state aid in other European nations and the risk of a political backlash at home, a German media chorus blasted on Saturday.