Morning Coffee: Traders have a major opportunity to buff bonuses for Q4. Deutsche results a reminder that it’s not just about revenues
Different risks hit differently depending on where you’re sitting. For the M&A and advisory franchises of the big banks, the second half of 2024 is looking like one to forget. Every time the market looks like opening up again, something happens, and the long awaited return of the financial sponsors clients gets postponed for another quarter. In two weeks’ time there are going to be Presidential elections, with a decent chance that uncertainty and litigation will drag on for a while after. And then it’s December, when no deals ever get done; the revenue year has all but finished.
Get Morning Coffee ☕ in your inbox. Sign up here.
Sales and Trading divisions, however, have a lot more to look forward to. For them, it was the first half of the year that was disappointing, but now there’s a lot more clarity about the macro outlook and Fed rates policy. And uncertainty is by no means a bad thing for a trading desk – it gives clients a reason to change their minds, and it scares off faint-hearted market makers, leaving more market share and wider spreads for people who think they can handle the risk.
Which means that sensible Managing Directors won’t have been approving any extended half-term holidays for their fixed income traders; it’s going to be all hands on desk for the week beginning November 3rd. Deutsche CFO James von Moltke has already predicted that “Usually we see strength around the US election as investors and also corporates need to position”, and his equivalents all over the Street will be giving pep talks to the troops. Barclays said something similar today.
And it’s not just about cancelling holidays. It would be quite bad to lose half your short-term interest rates team for a compliance webinar at a
Read more on efinancialcareers.com
