Today's Headlines

Bloomberg:

• Germany Sees ‘No Grounds’ for Speculation Over Deutsche Bank Aid. (video) Chancellor Angela Merkel’s government sees “no grounds” for speculation over state funding for Deutsche Bank AG, her chief spokesman said, pushing back against a magazine report that the German leader has ruled out any such aid. “There are no grounds for such speculation,’’ German government spokesman Steffen Seibert told reporters in Berlin on Monday when asked about the report. “The government won’t participate in any such speculation.’’ 
• Deutsche Bank's(DB) Pain in Germany's Too. 
• Why Deutsche Bank’s Shares Are at a Record Low: QuickTake Q&A.
• Shorts Waded Into Financials Just in Time for Deutsche Bank Rout. (video) Even before Deutsche Bank AG’s drop to a record low dragged down U.S. financial shares on Monday, investors were braced for the worst. Blame the Federal Reserve’s decision to hold interest rates steady last week, prolonging the wait for higher yields on cash holdings for financial firms. Traders responded by pushing short interest on an exchange-traded fund tracking the industry to a seven-month high, according to data compiled by Bloomberg and IHS Markit Ltd. That proven prescient as concerns over Deutsche Bank’s weakened finances sent an index of financial companies in the S&P 500 Index down 1.2 percent at 12:37 p.m. in New York, while the benchmark index lost 0.6 percent. It marked the latest hiccup for a sector already maligned by an 11 percent plunge this month for scandal-plagued Wells Fargo & Co., formerly the biggest U.S. bank by market value.
• Draghi Says U.K. Shouldn’t Get Any Favors in Brexit Deal. (video) Mario Draghi said the U.K. shouldn’t be granted any special favors on single-market access during negotiations over its exit from the European Union. “Any outcome should ensure that all participants are subject to the same rules,” the European Central Bank president told European Parliament lawmakers on Monday. “It is very hard to imagine that any agreement that will be perceived as discriminatory against some subjects or in favor of other subjects could be a source of stability for the future of our EU.”
• Moody’s Cut Spurs Worst Rout for Turkey Assets Since Failed Coup. (video) Turkish assets plummeted the most since an attempted coup in July and credit risk climbed after Moody’s Investors Service cut the country’s sovereign rating to junk. The currency was headed for the the lowest level in two weeks as of 4:23 p.m. in Istanbul, the Borsa Istanbul 100 Index posted the steepest decline among about 90 gauges tracked by Bloomberg globally, and the nation’s dollar debt due 2026 sank the most since July. Moody’s lowered Turkey’s sovereign rating one level to Ba1 late Friday, the highest non-investment grade, citing rising risks due to its external financing needs and slowing economic growth. 
• China Stocks Decline Most in Two Weeks as Volatility Resurfaces. (video) Chinese stocks slumped the most in two weeks as volatility returned before the start of a week-long holiday. The Shanghai Composite Index dropped 1.8 percent to close below the 3,000 level, with 13 stocks declining for each that rose. A gauge of 10-day volatility jumped to the highest in a month. Hong Kong’s Hang Seng Index retreated 1.6 percent, paring Asia’s best quarterly performance. The sudden drop came after turnover on China’s equity exchanges fell to the lowest level in two years as a booming housing market and an equity rally across the border in Hong Kong lured mainland investors. Margin traders cut bullish bets on the nation’s shares to the lowest level in more than a month on Friday. The Shanghai Composite is one of the world’s worst performing stock gauges this year after last summer’s $5 trillion rout. Holidays will close China’s financial markets for the whole of next week.
• Emerging-Market Assets Drop as Turkey Highlights Political Risk. Emerging-market assets fell for a second day, led by a plunge in Turkish stocks after Moody’s Investors Service cut the country’s credit rating to junk, underscoring political risks in developing nations. The MSCI Emerging Markets Index dropped 1.2 percent to 906.37 at 11:10 a.m. in New York. The decline reduced the benchmark’s rally since the end of June to 8.6 percent. It posted a 3.6 percent rally last week, the most since mid-July, as pledges from global central banks to sustain stimulus rekindled demand for riskier assets in developing nations.
• Europe Stocks Tumble as Deutsche Bank Sinks to Fresh Record Low. (video) A plunge in banks put a halt to the optimism that lifted European equities last week, sending them to their biggest slumps since early July. Growing worries over Deutsche Bank AG’s capital buffers dragged the stock to a fresh all-time low and cast a pall on its peers. A gauge tracking the firms trades at 0.66 times book value, less than any other industry group in the region and near a record low relative to the Stoxx Europe 600 Index. The benchmark measure lost 1.6 percent, erasing about two-thirds of the gains it posted last week, while banks traded at their lowest prices in more than a month. A measure of volatility for euro-area shares jumped the most since January after closing at the lowest level since 2014.
• Banks to Need Billions More Capital in Tests Under Fed Proposal. (video) Wall Street would have to come up with billions of dollars in additional capital in a proposed revamp of the Federal Reserve’s stress tests that would also scrap some parts of the annual exercise that lenders have criticized. As the Fed has previously signaled, it is considering changes that would raise the minimum capital targets that each bank has to have to receive a passing grade, Fed Governor Daniel Tarullo said Monday. But the Fed is also mulling concessions that Wall Street has sought, such as eliminating its assumption that lenders would continue to pay out the same level of dividends and buy back shares during periods of severe financial duress, Tarullo said.

CNBC:

• The hedge fund fee structure just took another blow. The heat on hedge fund fees is getting turned up, and one major player has made a significant capitulation. Facing investor redemptions and faltering performance, Brevan Howard, the London-based firm with a $14.5 billion flagship fund, is telling existing clients that it is waiving its management fee, CNBC has confirmed. Clients still will be charged a 20 percent performance fee. The change will not apply to new investors and will take effect Dec. 1. Brevan Howard's Master fund reportedly had declined 2.5 percent through August.
• Forget the OPEC oil freeze — worry about the thaw in output. (video)

Zero Hedge:

• "It All Has A Very 2008 Feel To It" - For Deutsche Bank, The News Just Keeps Getting Worse. (graph)
• 26 Incredible Facts About The Economy That Every American Should Know Before The Trump-Clinton Debate.
• The "Nightmare Scenario" For The Bank Of Japan Is Starting To Come True. (graph)
• US Bank Stocks Slide After New Fed Tests Suggest Need For "Significant Increase In Capital". (graph)
• BofA(BAC) Fined $12.5 Million For Creating At Least 15 Mini "Flash Crashes".
• WTI Crude Surges Back Above $46 On Saudi Hype But Traders Pile Into Protection. (graph)
• ECB Board Member Admits Central Bank's Monetary Policy Risks "Tearing Up Social Fabric".
• Germany Goes There: "You Can't Compare Deutsche Bank To Lehman". (graph)
• "My Order Book Is Abysmal" - Dallas Fed Contracts For 21st Straight Month. (graph)
• New Home Sales Tumble As Prices Hit 2-Year Lows. (graph)

The Telegraph:

• Global debt climbs towards fresh high as companies and countries keep on borrowing.
• The Deutsche Bank(DB) crisis could take Angela Merkel down – and the Euro.