Deutsche Bank is getting a new boss, Germany’s DAX enters correction and Turkish stocks get battered. Here are some of the things that people are talking about in markets this morning.
Turkish markets tank
The ruling AK Party, founded by President Erdogan, has failed to win a majority government for the first time since 2002. The result from the weekend’s elections leaves Turkish politicians just 45 days to form a coalition. If they can’t do that, the president can call another election. The prospect of a period of heightened political uncertainty has sparked a huge selloff in Turkish markets. The Turkish lira dropped to a record low against the dollar, the Borsa Istanbul 100 Index plunged 8 percent at the open and bond yields are surging.?
DAX enters correction
Following the worst week for German bonds since 1998, it’s Germany’s stock market stealing the limelight this morning after the DAX fell 10 percent from its record-high peak in April. The slide for German equities has closely tracked a plunging bund market: the correlation between bunds and stocks is a near a 1.5-year high. That QE-fuelled record high of April feels like a long time ago.
Deutsche Bank departures
C0-CEOs Anshu Jain and Juergen Fitschen have announced their resignations. In a surprise move on Sunday, the bank said former UBS CFO John Cryan will be stepping across from Deutsche Bank’s supervisory board to take the top job. After three years plagued by legal costs and missed targets, investors are cheering the change; the stock jumped as much 8 percent this morning, the most in almost three years.
China’s imports plunge
China’s imports plunged the most since February and exports dropped for a third straight month. The trade slowdown points to a struggling economy and reinforces some of the calls for more central bank support. In a case of what a few investors might call bad news = good news, the Shanghai Composite jumped more than 2 percent to a fresh 7-year high. China’s equity benchmark has now climbed over 150 percent in just 12 months.
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