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Focus on DB, Barclays, Monte Paschi
It is quite a shaky year-end for the European financials.

Deutsche Bank will pay $7.2 billion to DoJ

Deutsche Bank (+3.52%) agreed to pay $7.2 billion to the US Department of Justice (DoJ) to resolve a multi-year long lawsuit regarding its mortgage-backed-securities (MBS) dealings on the run up to the 2008 subprime crisis. The DB’s share price jumped 4.39% at the open.

The agreed $7.2 billion is roughly the half of the amount asked by the DoJ in September and does not cover for other complaints, including price fixings in the foreign exchange and metals markets, interbank rates manipulation and billions of dollars worth of funds driven out of Russia.

Although today’s settlement is not the end of the route, it has been a good short-term relief for investors, given that Deutsche Bank needn’t raise capital to cover for legal charges in the immediate future. We remind that Deutsche Bank’s share price had tanked shortly below €10 in September.

DB traded at €18.635 in Frankfurt today, its highest level since March.

Barclays rejected complaints

Barclays (-0.44%) rejected the DoJ complaints, saying that the bank has “an obligation to shareholders, customers, clients, and employees to defend [itself] against unreasonable allegations and demands”.

Monte Paschi saved by the government

Monte dei Paschi has been rescued by the Italian government after falling short at raising 5 billion euros from private investors. Paschi’s shares and other securities have been suspended. The bank could raise capital through ‘precautionary capital increase’.

On the other hand, the government's 20 billion-euro worth of rescue program for Italian banks has been approved by the EU.

Eurostoxx banks opened upbeat (+0.81%).

After having shortly peaked at 1.0499, the EURUSD bounced lower and consolidated between 1.0434/1.0452 in Asia. Traders remain seller on rallies, yet light option barriers stand from 1.0500 to 1.0700 at today’s expiry. Renewed positive momentum could temporarily send the pair into 1.0500/1.0550 mid-term resistance zone.

Pound depreciates before 3Q GDP and current account data

The pound extended losses against the greenback. The GBPUSD slid to 1.2271 in Asia. The divergence between the Bank of England (BoE) and the Federal Reserve (Fed) monetary outlook, combined to lingering Brexit concerns continue weighing on the pound.

The UK will release the third quarter growth and current account balance. The UK GDP is expected to have grown 0.5% quarter-on-quarter, while the current account deficit may have shrunk from 28.7 to 28.2 billion pound. A surprise softness in economic data could further weigh on the GBP-crosses. The key support is eyed at 1.2080, before 1.2000 handle. Cable is expected to finish the year in 1.2300/1.2250.

14-12-2020

GBP jumps on Brexit talks extension
The British pound has jumped in early trading this week after the UK Prime Minister and EU Commission President agreed to extend Brexit talks beyond Sunday. MARKETSThe S&P 500 fell on Friday, wrapping up a losing week, as the outlook for additional fiscal… Read more

10-12-2020

AirBnB IPO today
At its IPO price of $6 per share, Airbnb ABNB, is expected to raise at least $3.5 billion with an initial market capitalization topping $40 billion. MARKETSStocks fell on Wednesday, retreating from the record highs set earlier in the day, as tech shares strug… Read more

9-12-2020

S&P 500 closes over 3,700
MARKETSThe S&P 500 closed above 3,700 for the first time ever on Tuesday as Pfizer started to roll out its coronavirus vaccine in the U.K., lifting hope of the economy recovering in the near future. The Dow Jones gained 0.4% while the Nasdaq Composite clim… Read more

8-12-2020

Global stock market cap reaches $100 trillion for 1st time
The value of all the stocks in the world put together has reached a giant $100 trillion for the first time. MARKETSThe Dow fell 0.69% Monday, led by Intel and broad-based weakness in value stocks as rising Covid-19 restrictions offset optimism over an imminen… Read more

4-12-2020

Pfizer vaccine supply chain problems
MARKETS The S&P 500 fell slightly from record high. Major U.S stocks indices cut gains quickly in the final hour of trading after Dow Jones reported Pfizer now expects to ship half of the doses it had previously planned this year after finding raw materia… Read more

2-12-2020

Dollar Purge Continues
The US dollar dropped to fresh two-and-a-half year lows on Tuesday, with EUR/USD rising above the widely-watched 1.20 handle. MARKETSNews• Stocks in Asia-Pacific were mixed in Wednesday morning trade after major indexes on Wall Street surged to record highs o… Read more

1-12-2020

Bitcoin hits record high
The price of Bitcoin climbed 8.7% on Monday to reach a fresh record high of $19,857.03 - overtaking its previous peak made in 2017. MARKETSNews• Asia stocks rise as the Caixin/Markit manufacturing Purchasing Managers’ Index for November came in at 54.9 — its… Read more

30-11-2020

OPEC meeting starts
Today OPEC+ begin a 2-day meeting to decide whether to begin producing an extra 2 million barrels per day of oil, or delay for another 3-6 months. MARKETSNews• Asia-Pacific markets are mixed this morning while S&P 500 futures are down half a per cent. Ind… Read more