Aurelia Butler

FRANKFURT (Reuters) -Deutsche Bank on Wednesday promised more share buybacks next year and said it may return more capital to investors than it had previously envisaged, sparking a jump in its shares.The outlook on potential payouts came as Germany’s largest lender posted a better-than-expected 8% drop in third-quarter profit and previewed staff cuts with the CEO saying “we will further reduce” jobs.Revenue from investment banking slumped but grew in the lender’s retail and corporate divisions on higher interest rates. Deutsche was also slightly more optimistic on its revenue outlook for the full year. Deutsche Bank shares were up nearly 7% in midday Frankfurt trade as analysts cited positive news on potential buybacks and dividends.In an unexpected move, Deutsche said it would potentially return more capital to investors than the 8 billion euros it had envisaged through 2025.James von Moltke, chief financial officer, told journalists there was “upside” to the 8 billion, but “how much remains to be seen”.Analysts at Mediobanca (OTC:MDIBY) said the shares “should be rewarded for additional capital return”.Deutsche’s net profit attributable to shareholders was 1.031 billion euros, beating the around 937 million expected by analysts.Though earnings dropped, Deutsche recorded its 13th consecutive profitable quarter, a notable streak after years of hefty losses.”These results demonstrate strong and sustained business growth momentum combined with continued cost discipline,” CEO Christian Sewing said.He also told analysts staff reductions were in the offing: “We have seen the peak in our workforce and we will further reduce.”The earnings come as the investment bank faces uncertain business prospects in the coming quarters and as the retail division draws the scorn of regulators after it botched the integration of its Postbank arm, leaving customers complaining that they were locked out of their accounts and unable to reach call centres.The bank’s retail business was again the biggest revenue generator. Analysts expect the unit, which is undergoing a strategy review under new leadership, will overtake the investment bank as the main revenue driver for the full year, overturning the investment bank’s pole position over the previous three years.Investment banking revenue dropped 4%, better than an expected 5% drop. A 21% increase in revenue at the corporate bank slightly beat expectations and the retail division’s 3% rise came in below forecasts of 5%.Revenue for fixed-income and currency trading, one of the bank’s largest businesses, fell 12% after a strong year-ago quarter as lower market volatility dampened clients’ enthusiasm for trading.In comparison, similar trading at Goldman fell 6% in the quarter, while JPMorgan’s was up by 1%. Barclays reported a 13% fall in such revenue. Deutsche’s origination and advisory business was a bright spot, with revenue tripling to 323 million euros from a very low level a year earlier.Analysts with RBC capital markets called the earnings “mixed” in a note to investors.($1 = 0.9433 euros) More

The People’s Bank of China (PBOC) has expanded its basket of structural policy tools, including relending and rediscount facilities and other low-cost loans, but analysts say it is constrained now in how much it can ease monetary policy for fears of stoking capital flight and hurting the yuan. In order to support the economic recovery after it lost steam following a brief COVID rebound, the PBOC in September cut the amount of cash that banks must hold as reserves for the second time this year to boost liquidity.Thanks to a slew of policy support, the world’s second-largest economy staged a faster than expected growth in the third quarter, increasing the chances Beijing can meet its growth target of around 5% this year. China’s top parliament body approved 1 trillion yuan in sovereign bond issuance on Tuesday which official said will bolster the economic recovery, as policymakers still need to deal with multiple headwinds including persistent drag from the property sector. ($1 = 7.3162 Chinese yuan renminbi) More

The United States suspended import tariffs of 25% on EU steel and 10% on EU aluminium for two years from January 2022, replacing the tariffs imposed by former President Donald Trump with a tariff rate quote (TRQ) system. The TRQ allows up to 3.3 million metric tons of EU steel and 384,000 tons of aluminium into the United States tariff-free, reflecting past trade levels, with the tariffs applying for any further amounts. “We have never threatened to let TRQs expire and reinstate the 25% tariff on EU steel,” ambassador Mark Gitenstein told a group of reporters.”From the beginning, we have made clear to the EU that we intend to roll over our TRQs at the beginning of the year if we needed more time to negotiate,” he added.The United States and the European Union had sought to agree measures to address excess metal production capacity in non-market economies, such as China, and to promote greener steel.They also wanted a deal on critical minerals in time for a joint summit last week. However, they failed on both fronts.Gitenstein said the U.S. and the EU had made substantial progress in talks on steel and aluminium in the past two years and were committed to finding a solution in the coming months.The transatlantic partners were also seeking an agreement under which electric vehicles using cobalt, graphite, lithium, manganese or nickel extracted or processed in the EU would qualify for U.S. tax breaks. Gitenstein said the U.S. was committed to continuing these discussions too. More

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Investors reacted by narrowing the odds on the Reserve Bank of Australia (RBA) resuming rate hikes next month after four months of pauses, with futures now pricing in a 60% chance of a quarter-point hike to 4.35%, compared with 35% before the data.Data from the Australian Bureau of Statistics on Wednesday showed the consumer price index (CPI) rose 1.2% in the third quarter, above market forecasts of 1.1% and up from a 0.8% increase the previous quarter.The annual pace of inflation slowed to 5.4%, from 6.0%, but was again above forecasts of 5.3%. For September alone, the CPI rose 5.6% compared to the same month a year earlier, up from 5.2% in August.A closely watched measure of core inflation, the trimmed mean, rose 1.2% in the third quarter, to top forecasts of 1.1%. The annual pace slowed to 5.2%, from 5.9%.The Australian dollar rose 0.5% to a week high of $0.6390 and three-year bond futures tumbled 15 ticks to 95.68, the lowest since 2011. Markets are now seeing rates peaking at 4.43% early next year, up from 4.35% before the data release. Commentary from the Reserve Bank of Australia has also turned more hawkish in recent weeks. Michele Bullock, the new RBA governor, on Tuesday warned that there were risks inflation would prove more stubborn than expected and interest rates might have to rise further to bring it to heel.Policymakers have said they have a low tolerance for allowing inflation to return to target at a slower pace than currently expected. The central bank forecast in August that inflation was only projected to return to the top of the bank’s target band of 2-3% in late 2025.The central bank will release its updated economic forecasts in early November. More

Opposition presidential contender Xochitl Galvez said on X, formerly Twitter, that ex-minister Carlos Urzua had joined her right-left alliance bidding to unseat Lopez Obrador’s National Regeneration Movement (MORENA) in the June 2024 election.”Welcome to this team,” Galvez wrote on X, sharing a picture of herself and Urzua, who was finance minister from 2018 to 2019 at the start of Lopez Obrador’s presidency. Urzua quit in frustration at the direction of policy and has become a noted critic of the government.Urzua was not immediately reachable for comment.A respected economist, Urzua from 2000 to 2003 was Lopez Obrador’s top finance official when he was Mexico City mayor.Many economists have argued Lopez Obrador has hurt investor confidence by becoming embroiled in disputes with Mexico’s top trade partners.However, he remains a popular president, and MORENA’s candidate to succeed him, former Mexico City Mayor Claudia Sheinbaum, has a commanding lead over Galvez in opinion polls.Mexican presidents may only serve a single six-year term.Galvez heads the main opposition alliance comprising three parties ranging from the center-right to the center-left.Another opposition party, the center-left Citizens’ Movement (MC), is eyeing a separate bid that could split the vote. More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.Good news was good news on Tuesday, as another surprisingly strong snapshot of U.S. business activity boosted investor sentiment and risk appetite, which should pave the way for a positive open in Asian markets on Wednesday.Upbeat U.S. economic data often fuels Fed rate hike expectations, dragging stocks and other asset markets lower. But not this time – investors cheered the unexpected expansion in manufacturing and service sector activity, and the gloom that has descended on markets recently lifted.Asian markets should follow suit, as there’s not much locally for traders to get their teeth into – Australian consumer inflation for September and the third quarter are the only numbers likely to have any meaningful market impact.The three main U.S. indexes closed up between 0.6% and 0.9%, and U.S. tech giants Microsoft (NASDAQ:MSFT) and Google-parent Alphabet (NASDAQ:GOOGL) posted forecast-beating earnings after the bell.Investors’ immediate reaction, however, was mixed. Alphabet’s cloud-based revenue fell short of analysts’ expectations, pushing shares down more than 5% in after-hours trade, while Microsoft shares rose 4% after hours.In Asia on Wednesday, South Korea’s LG Display (NYSE:LPL) is expected to show a fall in quarterly revenue when it reports results. The Apple (NASDAQ:AAPL) supplier has posted losses for the last five quarters but is eyeing a turnaround in the final quarter of the year.On the economic data front, annual consumer inflation in Australia is expected to slow to 5.3% in the third quarter from 6.0% in the April-June period.But on a monthly basis, it is expected to rise to 5.4% in September from 5.2% in August, which would mark the first time this year that inflation has risen two months in succession.Reserve Bank of Australia governor Michele Bullock on Tuesday warned there were risks inflation would prove more stubborn than expected and that interest rates might have to rise further to bring it to heel.The Australian dollar liked what it heard, bucked the global trend of widespread weakness against the U.S. dollar, and goes into the inflation data on the front foot around $0.6360.Chinese assets remain under pressure, even though the blue chip CSI300 index snapped a four-day losing streak and rebounded from Monday’s four and a half year low.Meanwhile, there is a slew of China-related policy and political news for investors to digest.China’s top parliament body has approved a 1 trillion yuan sovereign bond issue and Beijing has appointed Lan Foan, a technocrat with little central government experience, as the new finance minister.Chinese President Xi Jinping made his first known visit to the nation’s central bank since he became president a decade ago, also seen by some as reflection of the government’s focus on supporting the economy.Here are key developments that could provide more direction to markets on Wednesday:- Australia CPI inflation (September/Q3)- South Korea consumer sentiment (October)- South Korea LG earnings (Q3) (By Jamie McGeever; Editing by Josie Kao) More