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While still deep in the red, the excessive losses seen by the European markets have cooled somewhat as lunchtime approached.

The release of a memo from Deutsche Bank CEO John Cryan to his staff seems to have taken the edge off of the German company’s dramatic decline this Friday. In it Cryan insisted that the fears surrounding the bank’s financial health were misplaced, pointing to the €215 billion it holds in liquidity reserves alongside the €1 billion it earned in half year pre-tax profit during the first 6 months of 2016 as examples of its ability to weather the storm it has found itself in since the $14 billion Department of Justice fine was revealed. This helped Deutsche Bank more than halve its morning losses, with the company now down less than 4% and, crucially, back above the €10 mark.

This in turn saw the European indices temper their own declines. The FTSE, aided by a better than expected 0.7% Q2 GDP figure, is now down just 1%; the DAX and CAC, meanwhile, have shrunk their losses to 1.1% and 1.4% respectively. In other words still ugly, but not quite as ugly as the situation just after the bell.

Looking ahead to the US open and once again the Dow Jones is avoiding the Deutsche Bank drama, the futures suggesting a 10 point increase once the US session starts. The Dow has quite a bit of B-tier data to deal with this afternoon; the core PCE price index, personal spending and personal income figures all arrive before the bell, while the Chicago PMI and revised UoM consumer sentiment and inflation expectations readings are released later in the afternoon.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Connor Campbell

Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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