Manufacturers from the eurozone’s two largest economies painted a gloomy picture of the outlook for the sector on Wednesday, with closely-watched indicators sinking to more than two-year lows in both countries. In Germany, the decline in sentiment extended to the services sector, dragging the composite output purchasing managers’ index to a 41-month low of 52.7. The fall in the gauge was far sharper than analysts polled by Reuters had expected: a drop of just 0.2 points to 54.8 had been anticipated.

Nasdaq, the exchanges operator, reported a 4.1 per cent drop in net income for the third quarter, which included an $8m loss related to the default of Einar Aas, a private Norwegian trader whose bets in the European power market collapsed last month, the Financial Times reported. Nasdaq is the principal trading exchange where futures contracts tied to physical energy markets in the Nordic region are transacted. The loss contributed to an increase in Nasdaq’s overall operating expenses in the quarter to $354m from $341m a year ago.

Fears of a lengthy slowdown in eurozone growth intensified on Wednesday after an influential poll of sentiment fell to its lowest level in more than two years. The sharp decline in the purchasing managers’ index reflected signs that the global trade war is having broad repercussions on the economy of the world’s largest trading bloc. The index reading for the single currency area fell to 52.7 in October, down from 54.1 in September, and the lowest figure for 25 months.

The European Commission has rejected Italy’s draft budget. Valdis Dombrovskis, the commission’s vice-president responsible for the euro, said this week that Rome’s arguments for increasing its fiscal deficit were “not convincing,” the Financial Times reported. The Italians had been warned. But the Five Star/League coalition government nevertheless decided to pursue a fiscal expansion instead of the adjustment prescribed by European rules.

Two former executives of collapsed oil firm Afren were convicted on Wednesday of fraud and money laundering offences relating to a $300 million business deal, the UK’s Serious Fraud Office (SFO) said, Reuters reported. Former Afren Chief Executive Osman Shahenshah and former Chief Operating Officer Shahid Ullah received more than $17 million and laundered $45 million, some of which was used to buy luxury properties in Mustique and the British Virgin Islands, it said here.

After multiple turnaround plans and promises to restore growth, Deutsche Bank AG investors are no longer buying the talk, Bloomberg News reported. The German lender -- already the worst-performing major bank stock in Europe this year -- closed at a record low on Wednesday after Chief Executive Officer Christian Sewing conceded that cuts to the investment bank are having a deeper impact than expected. The continued bleeding, despite a decade-long bull market, is fueling speculation the bank may need to be merged before the next crisis hits.

UK Gourmet Burger Kitchen (GBK) filed for a form of bankruptcy protection on Wednesday after running up millions of pounds of losses, the latest British retail name to fall victim of weak consumer spending and high costs, Reuters reported. The chain’s parent, South Africa’s Famous Brands, said the board of GBK had initiated a company voluntary arrangement (CVA) for the business that would allow it to avoid insolvency or administration and ensure its continued existence.

Brussels has rejected Italy’s draft budget in an unprecedented move that threatens to deepen rifts between the European Commission and the populist government in Rome, the Financial Times reported. Valdis Dombrovskis, the commission’s vice-president responsible for the euro, said Brussels had “no alternative” but to demand changes, after Rome defied warnings that its plans for a wider deficit would smash EU fiscal rules and flout the country’s previous commitments. The move is the first time Brussels has refused to endorse an EU member state’s draft budget.

Active fund managers in Europe’s junk bond market believe the end of easy money may give them new grounds to fight back against ETFs, Bloomberg News reported. Some bond pickers claim investors will find it increasingly difficult to exit funds tracking benchmark indexes as liquidity is drained by central banks tightening monetary policy. Illiquidity is especially a concern in high-yield credit, where investors holding cash bonds can face steep penalties if they rush for the exit.

The price of Italian government debt has risen after the country’s government rebuffed a rebuke from Brussels over its spending plans but pledged not to expand the country’s deficit further after next year, the Financial Times reported. The yield on 10-year Italian government bonds dipped by 5 basis points to 3.41 per cent, extending a fall of 12 bps prior to the release of the statement. It was briefly down almost 30 bps just after the opening of trade. Its spread over the equivalent German Bund - a widely watched indicator of eurozone political tension - fell by 7 bps, to 293 bps.