Good morning! Here’s what you need to know in markets on Monday.
Deutsche Bank’s talks with the US Justice Department to settle a high-profile set of mortgage-securities cases are continuing, according to people familiar with the matter. The Wall Street Journal reports that the talks are moving forward, but they have not progressed to the stage where a proposed deal has reached senior-level review at the Justice Department or with Deutsche Bank’s supervisory board.
Japanese stocks rose on Monday as global risk asset markets took heart from easing concerns over Deutsche Bank, triggering a relief bounce in financial sector shares. The Nikkei stock market is up 0.89% at the time of writing (6.25 a.m. BST/1.25 a.m. ET), while in China the benchmark Shanghai Composite is up 0.23% and the Hong Kong Hang Seng is up 1.24%.
Manufacturing data is coming. Markit manufacturing PMI figures for September will be released for Spain, Italy, France, Germany, Greece, Britain, and the European Union as a whole from 8.15 a.m. BST (3.15 a.m. ET) onwards. Economists expect a sharp slowdown in growth in Britain’s manufacturing sector.
Prime Minister Theresa May said on The Andrew Marr Show on Sunday that the UK will trigger Article 50, which kicks off the formal process to leave the European Union, before “the end of March next year.” The announcement comes after May told The Sunday Times in an interview that the UK will not wait for German elections due in September 2017 before triggering Article 50.
The pound is falling after the Prime Minister set a date for Article 50. Sterling is down 0.29% against the dollar to 1.2940 at the time of writing (6.40 a.m. BST/1.40 a.m. ET) and down 0.20% against the euro to 1.1520.
Liam Fox, the International Trade Secretary, dropped another big hint that Britain is heading for a “hard Brexit,” where Britain pulls out of the European single market and, in turn, ends the free movement of people. Speaking at a fringe event at the Conservative Party conference in Birmingham which Business Insider attended, Fox, who campaigned for Leave, said the British government would prioritise ending “uncontrolled” migration during Brexit talks.
Donald Trump may have avoided paying federal income taxes for 18 years, according to tax records obtained by The New York Times and published on Saturday night. The documents indicated that Trump declared a $916 million (£708 million) loss in 1995, providing him with a deduction so large it could have eliminated his obligation to legally pay annual federal taxes by up to $50 million (£38.6 million) for nearly two decades, tax experts told The Times.
Italy’s economy minister has called a meeting with some of the country’s top bankers on Monday to discuss stalled efforts to sell four small banks that were rescued from bankruptcy last year, sources said. Bank of Italy Governor Ignazio Visco was expected to join the gathering, which comes just days after sources said the European Union had agreed to extend a September 30 deadline for the sale of the troubled lenders.
Goldman Sachs thinks the next stage of development in fintech — financial technology — is going to be partnerships between big banks and startups. It’s actually the third wave of the industry’s development, according to Jeff Gido, Goldman Sachs’s Global Head of Fintech in the investment banking division.
The CEO of marketplace lender Funding Circle says the industry is going through a “golden age” despite troubles for platforms like Lending Club this year. Samir Desai told Business Insider: “It was certainly a tough first half of the year with various things going on with Lending Club, which caused investors to take another look, and then the stuff with Brexit. But actually, what I’ve always said is I think we’re in this golden age for our industry.”