There's your 5 top things to know this Friday.
1. Deutsche Bank hits 30-year low
Deutsche Bank dropped below €10 in early European trade on Friday, hitting a near 30-year low mounting concerns about the survival of Germany’s biggest lender.
Worries about its capital position, overburdened by a $14 billion fine from the U.S. authorities related to its mortgage-securities investigation, have recently sent the bank’s shares into a tailspin and sales were exacerbated by a Bloomberg report that a number of hedge funds that clear derivatives trades with Deutsche had withdrawn some excess cash and adjusted positions held at the lender.
After its U.S. shares closed with a nearly 7% plunge, its European stock followed the rout on Friday with losses of nearly 6%.
However, Deutsche pared gains in European mid-morning after chief exec John Cryan wrote a memo stating that “market forces” were responsible for the share slide and there was no basis for concern over the bank’s health.
Still, the European financial sector was lower across the board on Friday while the euro hit a two-month low against the safe-haven Swiss franc.
2. Japan, China data disappoints
Japan’s national core CPI for August fell 0.5%, more than the expected 0.4% decline year-on-year and the sixth straight drop, matching July's pace. That was despite Bank of Japan’s efforts to provide massive amounts of stimulus to spur inflation.
In other negative news for the world’s third largest economy, household spending for August was down a sharp 3.7%, compared to a drop of 1.0% seen month-on-month and a decline of 4.6% year-on-year, more than the 2.5% fall seen; while seasonally adjusted average unemployment rate in August unexpectedly edged up.
On the upside, industrial production in Japan for August rose 1.5% provisionally, handily beating an expected gain of 0.5%.
Over in China, the factory sector continued to limp along in September as the Caixin manufacturing PMI came in at 50.1 as expected with holidays in China next week in focus going forward.
3. Global stocks turn lower
Concerns over the health of Germany’s largest bank hit global stocks on Friday, undermining risk appetite.
Asian stocks closed mixed on concern of global financial contagion from Deutsche Bank’s woes and after the string of data. Tokyo’s Nikkei 225 slumped 1.46%.
European stocks moved sharply lower on Friday with financial institutions leading the sell-off.
U.S. futures were only slightly lower as the Bloomberg report on Deutsche Bank was priced in before Thursday’s close, dampening sentiment in equity markets.
4. Oil slumps more than 1%
Oil prices slumped on Friday as investors took profits following a 7% gain in the last two sessions, amid doubts that OPEC's first planned output cut in eight years would make a substantial dent in the global crude glut.
Several analysts had expressed skepticism over the future deal and whether it would have a material impact. Even if the cartel strictly abided by the quotas eventually set, they expressed concern that production elsewhere would ramp up to take advantage of higher profit.
In that light, investors looked ahead to data from oil services provider Baker Hughes’ later in the session. Last week, the figures showed that the number of active rigs drilling in the U.S. had increased for the twelfth time the last 13 weeks.
U.S. crude oil futures fell 1.48% to $47.12 at 10:02GMT, while Brent oil traded down 1.75% to $48.94.
5. U.S. personal spending and inflation data in focus
Market participants will also focus later in the session on personal income and spending for August, along with the Fed’s preferred inflation gauge, the core PCE price index, for the same month, out at 12:30GMT.
Attention will also be paid to the Chicago PMI and the revised Michigan consumer sentiment, both for the month of September.
Furthermore, Dallas Fed president Robert Kaplan will participate in a Q&A at 17:00GMT.