Asia

Seven days ago, Deutsche Bank turned in what various sellside desks described as “horrible”, “grim” results for both Q4 and 2015 as a whole.

The bank posted its first annual net loss since the financial crisis, reporting red ink that totaled more than $7 billion as investment banking revenue fell plunged by some 30%.

On Thursday, we learn that Credit Suisse lost nearly $6 billion in the fourth quarter. The 2015 net loss came to nearly $3 billion. 

After yesterday's torrid, chaotic moves in the market, where an initial drop in stocks was quickly pared and led to a surge into the close after a weaker dollar on the heels of even more disappointing US data and Bill Dudley's "serious consequences" speech sent oil soaring and put the "Fed Relent" scenario squarely back on the table, overnight we have seen more global equity strength on the back of a weaker dollar, even if said weakness hurt Kuroda's post-NIRP world and the Nikkei erased virtually all losses since last Friday's surprising negative rate announcement.

While the biggest news of the night had nothing to do with either oil or China, all that mattered to US equity futures trading also was oil and China, and since WTI managed to rebound modestly from their biggest 2-day drop in years, continuing the trend of unprecedented, HFT-driven volatility which has far surpassed that of equities and is shown in the chart below...

Over the past year, and certainly in the aftermath of the BOJ's both perplexing and stunning announcement (as it revealed the central banks' level of sheer desperation), we have warned (most recently "Negative Rates In The U.S. Are Next: Here's Why In One Chart")  that next in line for negative rates is the Fed itself, whether Janet Yellen wants it or not. Today, courtesy of Wolf Richter, we find that this is precisely what is already in the small print of the Fed's future stress test scenarios, and specifically the "severely adverse scenario" where we read that:

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