10 things you need to know in markets today

Jeff Bezos, Chairman and founder of Amazon.com and owner of The Washington Post, addresses the Economic Club of New York, at the Sheraton New York Times Square Hotel, October 27, 2016 in New York City. Bezos discussed the future of Amazon, space travel, and his ownership of The Washington Post. (Photo by)Drew Angerer/Getty ImagesJeff Bezos, Chairman and founder of Amazon.com.

Good Morning! Here’s what you need to know on Wednesday.

1. Amazon is the latest tech giant about to be slapped with a massive fine. The European Commission is preparing to bill the company for back taxes in Luxembourg, where Amazon has set up a complex structure to pay minimal tax on its European operations, The Financial Times first reported. The bill could total several hundred million euros and will reportedly be announced on Wednesday around 11.00 a.m. BST (6.00 a.m. ET).

2. Spain’s King Felipe VI made a rare televised address to the country, criticising the Catalan government after the region held an independence referendum on Sunday. Catalan authorities “have placed themselves outside the law and democracy, they have tried to break the unity of Spain and national sovereignty,” he said. It was the “responsibility of the legitimate powers of the state to ensure the constitutional order,” he added.

3. Yahoo’s infamous hack — already one of the worst in history — is even worse than previously thought. All 3 billion user accounts it had in 2013 were affected by the security breach, the company, which Verizon acquired in June, said on Tuesday. Yahoo had previously estimated the hack affected 1 billion accounts.

4. The European Parliament has voted to say that Brexit talks should not move on to the next stage as there has been no “sufficient progress.” MEPs on Tuesday backed a motion by 557 votes to 92 that said negotiations should not be allowed to progress to the future relationship between the UK and the European Union unless there is a “major breakthrough.”

5. UBS is cutting earnings estimates for Wall Street firms, saying the industry is unprepared for impending European regulatory changes. The sweeping market regulatory reforms in Europe known as MiFID II (Markets in Financial Instruments Directive) are set to go live at the start of 2018, and uncertainty is lingering across the financial world regarding the extent of the impact.

6. Wall Street’s top oil watcher says there are three geopolitical headwinds that might be “coming to a head in October” — and they could have implications for oil markets. The three risks come from uncertainty surrounding Iraq’s Kurdish region, the nuclear deal with Iran, and the ongoing crisis in Venezuela, according to RBC Capital Markets’ Helima Croft.

7. For the first time in 23 years, JPMorgan leads US banks in total deposits, according to data released this week by the Federal Deposit Insurance Corp. The firm’s deposits grew by $US96 billion, or 7.9%, in the past year to reach $US1.31 trillion as of June 30, 2017, according to the FDIC. That was enough to edge out Bank of America Merrill Lynch, which finished with $US1.29 trillion.

8. Goldman Sachs CEO Lloyd Blankfein says he’s still studying bitcoin, adding that people were also “sceptical when paper money displaced gold.” The billionaire banker tweeted on Tuesday that he wasn’t completely sure about his stance on the red-hot cryptocurrency. Blankfein said he’s “still thinking about bitcoin” and that he was not flat out endorsing or denouncing the digital currency.

9. The toxic environment at the top of Tesco during 2014’s accounting scandal led to “compromised” staff, nervous breakdowns, and resignations, a court heard on Tuesday. Opening the prosecution’s case for a third day, Sasha Wass QC told a jury at Southwark Crown Court that two staff in Tesco’s commercial finance team “felt so compromised by the misrecording of profits that they did resign rather than engage in what they considered to be practices that were unlawful.”

10. The Bank of England continues to warn about possible post-Brexit risks to the stability of the UK’s economy. The bank published the record of its latest Financial Policy Committee meeting on Tuesday and both clearing and Brexit were high on the agenda. The FPC — which is tasked with ensuring financial stability in the UK — said that there are “significant risks from disruption to cross-border clearing activity between the UK and EU.”

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