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Deutsche settles US bond manipulation case; US Bancorp reveals CECL impact

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Deutsche settles US bond manipulation case; US Bancorp reveals CECL impact

Deutsche Bank AG paid $15 million to settle a lawsuit that charged the German lender of inflating prices and overcharging investors for mortgage bonds issued by government-sponsored enterprises Fannie Mae and Freddie Mac, Pennsylvania Treasurer Joe Torsella announced in a press release. Deutsche Bank was the first bank to settle the civil claims among the financial services companies accused of rigging U.S. mortgage markets between 2009 and 2016.

JPMorgan Chase & Co. has placed on leave two of its metals traders, Gregg Smith and Michael Nowak, as a U.S. criminal investigation into the bank's metals trading practices is underway, a source for Reuters says. JPMorgan, which deals a lot in gold trading globally, is being probed over metals spoofing trades. Nowak and another former JPMorgan trader, Robert Gottlieb, are defendants in at least one other civil suit related to metals spoofing at the bank. Christiaan Trunz and John Edmonds, former JPMorgan metals traders, have already pleaded guilty to spoofing charges, the news outlet noted.

U.S. Bancorp expects a $1.2 billion to $1.6 billion impact from the adoption of the current expected credit losses standard, or CECL, in the first quarter of 2020. The bank trimmed its net income growth projection for the year to a range of 5% to 7% from 6% to 8% previously. EPS growth was likewise walked back to 7% to 10% from 8% to 10%. U.S. Bancorp expects CECL to raise its reserve-to-loan ratio to between 1.90% and 2.00% from 1.53% in the second quarter.

The U.S. government is looking at issuing ultra-long bonds, initially 50-year bonds next year, to boost its borrowing capabilities amid a low-interest rate environment, Treasury Secretary Steven Mnuchin told CNBC in an interview. Mnuchin said issuing longer 100-year bonds is also an option if the potential 50-year bonds succeed. The country's longest-dated government bonds so far mature in 30 years.

Citigroup Inc.'s newly appointed head of emerging EMEA markets, Atiq Rehman, expects the bank's revenues in the Middle East and Africa to continue growing despite falling oil prices and political uncertainty in the region, Bloomberg News reports. Rehman sees a slower mid-single-digit rate in 2020, though, from the usual 10% yearly growth, backed by Citigroup's markets, cash management and investment banking businesses. Citigroup bagged a key adviser role in Saudi Aramco's upcoming $100 billion IPO, according to a Reuters report.

In Oklahoma, Cowboy Bancshares LLC is looking to become a bank holding company by acquiring 100% of the voting shares of Bank of Kremlin, a unit of Kremlin Bancshares Inc.

Jacksonville, Fla.-based financial technology provider Black Knight Inc. acquired San Francisco-based Compass Analytics LLC, which provides pricing and valuation solutions to support loan officers and capital markets professionals. The acquisition is expected to increase Black Knight's technology footprint in capital markets.

Square Inc. is testing the idea of adding a new feature on Cash App that would allow its users to buy and sell stocks for free, a source for Bloomberg News says. As of now, Square's Cash App already allows its customers to buy and sell Bitcoin and the free stock trading feature would compete directly with fintech startup Robinhood Markets Inc. The new service may challenge established online brokers like E*TRADE Financial Corp., according to the report.

In other parts of the world

Asia-Pacific: HKEX open to up LSE bid; Malaysia keeps key rate; Salesforce funds open banking

Europe: ECB cuts rate, rolls out new stimulus package; HKEX open to sweetening LSE offer

Middle East & Africa: KFH seeks to buy AUB in $8.8B deal; Japan's MUFG to build MEA banking network

Now featured on S&P Global Market Intelligence

Fidelity National to seek smaller buys, return capital after scuttled deal: Smaller deals, increased dividends and more share buybacks are possibilities for Fidelity National Financial Inc. following its terminated deal to buy Stewart Information Services Corp., but an acquisition on a similar scale is unlikely.

Simmons First boosts asset size more than 500% in 6 years: Simmons First National Corp. recently announced the bank's 11th acquisition of a bank over the last six years, and management said more could come in the years ahead.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng rose 0.98% to 27,352.69, and the Nikkei 225 rose 1.05% to 21,988.29.

In Europe, around midday, the FTSE 100 was down 0.06% to 7,340.47, while the Euronext 100 was up 0.26% to 1,094.53.

On the macro front

The retail sales report, the import and export prices report, the business inventories report, the consumer sentiment report and the Baker-Hughes Rig Count report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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