Bloomberg.- Stocks fell as concern over Deutsche Bank AG’s finances outweighed speculation that U.S. presidential nominee Hillary Clinton beat Donald Trump in their first debate. Mexico’s peso rallied. Oil sank.
Equities wiped out gains, while European bonds from higher-rated nations climbed as uneasiness about the health of Germany’s largest lender sparked demand for the safest assets at the expense of those from more indebted nations.
Mexico’s peso led gains among the world’s major currencies as polls conducted after the U.S. presidential debate favored Clinton over Trump, who has vowed to renegotiate the North American Free Trade Agreement. Oil slumped as Iran said it’s unwilling to freeze output at current levels and wants to raise production to 4 million barrels a day.
Traders sought relatively safer assets amid renewed concern over Europe’s financial companies after the cost of insuring Deutsche Bank’s subordinated debt rose to a record and Commerzbank AG was said to plan job cuts.
Meanwhile, U.S. financial markets were judging it in favor of Clinton after last night’s debate. Citigroup Inc. has said a Trump win in November could sink equities and warned this week it may also spur volatility in both gold and currency markets.
“There’s concern about the health of European banks,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. “And despite the perceived result of the U.S. presidential debate, we expect the market to become more nervous if polls remain close.”