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Equities Tumble On Deutsche Bank Jitters, Swiss Franc Surges

Published 09/30/2016, 03:28 AM
Updated 03/09/2019, 08:30 AM

Global equities tumbled again as led by bank shares on Deutsche Bank (DE:DBKGn) jitters. It's reported that around 10 of Deutsche Bank's derivatives clearing clients were cutting of their exposures by pulling their holdings to other firms. DJIA lost -195.79 pts or -1.07% to close at 18143.45 while S&P 500 dropped -20.24 pts or -0.93% to close at 2151.13. Asian markets follow with Nikkei trading down -1.5% at the time of writing. WTI crude oil stays firm above 47.5 as supported by news of OPEC production cut. Gold is trading in recent established range gyrating around 1325. In the currency markets, Swiss Franc is set to close the week as the strongest major currency on safe have flows. But the Japanese yen, on the other hand, are set to be the weakest one on BoJ expectations. Commodity currencies are generally firm.

In US, Kansas City Federal Reserve President Esther George said "on the whole when you look at how labor markets are continuing to move forward in the context of lower growth it suggests that there is opportunity to remove that accommodation." Philadelphia Fed president Patrick Harker said that "if things continue on the trajectory that I anticipate, December would be an appropriate time for a rate increase."

Atlanta Fed President Dennis Lockhart said that interest rate would be raised "before long". However, "before taking the next move, it makes sense to see a little more evidence of progress toward our statutory policy objectives." Minneapolis Fed President Neel Kashkari said that "there does not appear to be any urgency to raise rates when inflation is coming up low."

Fed chair Janet Yellen said yesterday that Fed won't be able to buy stocks unless Congress changed the law. But "there could be benefits to the ability to buy either equities or corporate bonds." Yellen said Fed needs a "wider range of tools". Yellen also said earlier this week that there is no "fixed timetable" for another rate hike.

On the data front, New Zealand Building permits dropped -1.0% mom in August. NBNZ business confidence rose to 27.9 in September. Japan national CPI core was unchanged at -0.5% yoy in August while Tokyo CPI core dropped to -0.5% yoy in September. Unemployment rate rose to 3.1% in August, house hold spending dropped -4.6% yoy, industrial production rose 1.5% mom. China Caixin PMI manufacturing rose 0.1 pts to 50.1 in September.

Looking ahead, UK will release GDP final, current account and index of services. Eurozone will release unemployment rate and CPI flash. Canada will release GDP, IPPI and RMPI. US will release personal income and spending, Chicago PMI.

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