Good morning! Here are the 10 things you need to know in markets this Tuesday.
China’s manufacturing PMI report for November has come in below expectations, at a more than 3-year low. According the government, the index slipped to 49.6 in November, missing expectations for an unchanged reading of 49.8. Anything below 50 signals contraction.
Asian markets are mixed despite the reading. China’s Shanghai Composite is down 0.19% at time of writing (6.40 a.m. GMT/1.40 a.m. ET), but the Hong Kong Hang Seng is up 1.98%, and Japan’s Nikkei is up 1.34%.
European manufacturing data is coming. Between 8.45 a.m. GMT (3.45 a.m. ET) and 9.00 a.m. GMT (4.00 a.m. ET) we’ll get manufacturing PMIs from Italy, France, Germany, Greece, the Eurozone, and the UK. We’re also due unemployment figures from Germany, Italy, and the Eurozone.
The Bank of England’s annual Financial Stability Report and stress testing results will be released shortly. Together they map out the vulnerabilities of Britain’s banking system to prepare for the worst. This year’s stress test — which war games nightmare scenarios on bank’s balance sheets — is a global recession driven by a crash in China. There are fears the results could force Lloyds to trim its dividend.
Morgan Stanley is about to make deep cuts to its fixed-income business. That’s according to Bloomberg’s Ambereen Choudhury, Michael J. Moore and Hugh Son, who report that the cuts will take place over the next two weeks, citing two people with knowledge of the plans.
The International Monetary Fund has officially designated the Chinese yuan a global reserve currency. That means that it joins an elite group of currencies — the dollar, the yen, the euro, and the pound — in the Special Drawing Rights (SDR) basket.
Brazil’s leading investment bank may need to sell itself to survive in the wake of a corruption scandal and the arrest of its co-founder and former CEO. BTG Pactual’s stock has been crippled by the investigation into Andre Esteves, with the shares falling by about 30% in a matter of days.
Samsung announced on Monday that it’s replacing its president of mobile communications — the latest sign of change at the electronic giant’s ailing smartphone business. According to Bloomberg, Samsung will replace its former president of mobile communications, Shin Jong-Kyun, with Koh Dong-Jin, who was part of the Galaxy S6 and Note 5 business. The move was announced as part of Samsung’s annual year-end management reorganization.
Brazil filed a 20 billion Brazilian reais ($5.2 billion, £3.4 billion) lawsuit on Monday against BHP Billiton and Vale to clean up what it says was its worst environmental disaster, caused by the collapse of a tailings dam. The governments of Brazil and those of two states hit by the damburst sued iron ore operator Samarco and its co-owners, the world’s largest miner BHP Billiton and the biggest iron ore miner Vale.
New York Governor Andrew Cuomo is preparing to impose new regulations on banks operating in the state to prevent money laundering and the financing of militant groups. The new rules, which Cuomo plans to propose this week, will force a chief compliance officer to certify whether a bank maintains systems to detect and prevent illicit money transfers.