10 things you need to know in markets today

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Good morning! Here’s what you need to know in markets on
Wednesday.

1. Deutsche Bank on Wednesday posted a 14% drop in net profit in
the second quarter from a year earlier, as Germany’s largest bank
restructures under new leadership. Deutsche
last week already flagged that net profit would be more than
double analysts’ forecasts in a rare piece of good news for the
bank, which is cutting costs to revive profitability.

2. Tight checks by Chinese customs officials to halt the
smuggling of scrap steel to Southeast Asia have forced some
exporters to cancel or delay shipments, benefiting rivals like
Russia that are prowling for market share amid a raging Sino-U.S.
trade war. Among those that have canceled or
delayed cargoes are Chinese exporters that have been taking
advantage of Beijing’s generous tax rebate system on value-added
steel, Reuters reports.

3. US President Donald Trump told Mexico’s President-elect in a
letter that a quick renegotiation of the North American Free
Trade Agreement (NAFTA) would bring more jobs for both countries,
but warned of a “very different” path
otherwise. In a letter to Andres Manuel Lopez
Obrador, who won Mexico’s presidential election on July 1, Trump
said that he was looking forward to working closely together to
build a great relationship.

4. Brussels, Athens and Piraeus are among cities London insurance
brokers could consider for European Union subsidiaries, with time
running out to plan for a hard Brexit, a trade body said on
Wednesday. The Lloyd’s of London commercial
insurance market is setting up an EU subsidiary in Brussels to
start writing business from January 2019.

5. The Chinese yuan tumbled to a 13-month low Tuesday
as Beijing announced it would pursue tax cuts and other
expansionary measures, spurring expectations for loosening
monetary policy.  The yuan dipped as low
as 6.8264 per dollar overnight, its weakest point since June
2017.

6. Morgan Stanley’s James Gorman has the highest approval rating
of any major bank CEO, according to data from the UBS Evidence
Lab. JPMorgan’s Jamie Dimon, and Goldman Sachs’
outgoing leader, Lloyd Blankfein came in second and third,
while Tidjane Thiam of Credit Suisse and Deutsche Bank’s new
boss Christian Sewing brought up the rear.

7. The European Union’s budget commissioner, Guenther Oettinger,
said on Wednesday the bloc could try to seek a wide reduction of
tariffs in negotiations with the United States this
year. “In this way, we want to avoid a further
escalation of the trade conflict, and to avoid a trade war,”
Oettinger, a German, told Deutschlandfunk radio.

8. The European Commission has found evidence that carmakers are
already manipulating emissions for new climate rules that take
effect in 2020, the Financial Times reported on
Tuesday. The EC’s Joint Research Centre, or
JRC, said it found evidence from 114 data sets that indicate some
automakers were “configuring their test vehicles in such a way
that the measured Worldwide Harmonised Light Vehicle Test
Procedure (WLTP) are inflated.”

9. The cost of insuring Tesla bonds against default via
credit default swaps hit an all-time high on
Tuesday. The cost of insuring $100 of Tesla
debt hit $6.58 around 10:30 am Tuesday, according to data from
Bloomberg, amid fresh fears over Tesla’s cash position. The car
company has $10.68 billion of outstanding debt.

10. The NHS is preparing to stockpile medicines and
blood products in case of a “no deal” Brexit, Matt
Hancock has said. The Health Secretary said he
met with medical industry leaders to “accelerate” preparations
for the possible outcome.