Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Deutsche Bank this morning posted its biggest quarterly loss since the depths of the financial crisis as it absorbed the cost of laying off thousands of workers – with the UK and US in the crosshairs.
Germany’s largest lender posted second-quarter net loss of €3.1bn after a charge €3.4bn for redundancy and other costs.
Deutsche Bank has struggled for the best part of a decade since the financial crisis, with multiple leaders failing to turn it around. Christian Sewing, Deutsche’s latest chief executive, finally bit the bullet and decided to scale back the underperforming investment bank at the start of the month – with 18,000 job cuts worldwide.
Sewing said:
We have already taken significant steps to implement our strategy to transform Deutsche Bank. These are reflected in our results. A substantial part of our restructuring costs is already digested in the second quarter.
Excluding transformation charges the bank would be profitable and in our more stable businesses revenues were flat or growing. This, combined with our solid capital and liquidity position, gives us a firm foundation for growth.
Deutsche’s second-quarter net income would have been €231m without the redundancy charges, it said. However, revenues still fell by 6%.
Economists at the bank and elsewhere will have their eyes on Germany’s latest purchasing managers’ index
In the UK London is set for another scorcher weather-wise, but Aston Martin Lagonda’s high-paid chief executive Andy Palmer has an uncomfortable day ahead of him for other reasons as he explains cuts to its sales forecasts a week before half-year results.
The British carmaker blamed deeper “macro-economic uncertainties” than the carmaker highlighted in May, and said that it anticipates the “softness” to continue for the rest of the year.
Alex Janiaud
(@alexjaniaud_ic)Breaking: Aston Martin lowers guidance for FY2019 volumes down from 7,100-7,300 vehicles to 6,300-6,500 as the “challenging external environment…has worsened” $AML
Ominously, Aston Martin also said it was taking “immediate actions to improve efficiency and reduce our fixed cost base”.
Just ahead of the open in Europe, equity markets in Asia have a sunnier disposition, with shares higher on Wednesday thanks to the promise of new trade talks between the US and China. Bloomberg reported that US trade representative Robert Lighthizer will travel to Shanghai next week.
Shares on the Australian Securities Exchange (ASX) 200 rose by 0.8%, hitting 12-year highs.
The agenda
- 8:30am BST: Germany manufacturing and services purchasing managers’ index (PMI) (July)
- 9am BST: Eurozone manufacturing and services PMI (July)
- 9:30am BST: UK Finance mortgage approvals (June)
- 2:45pm BST: US manufacturing and services PMI (July)
