Risk appetite finds footing aided by a liquidity and confidence boost at Credit Suisse – FXStreet

Credit: Original article can be found here


EU mid-market update: Risk appetite finds footing aided by a liquidity and confidence boost at Credit Suisse; sentiment remained fragile ahead of ECB decision.


– For the time being a global banking crisis appears unlikely, but markets will seek further clarity on how widespread the fallout could be.

– Swiss National Bank provides support to Credit Suisse in effort to restore market calm.

– Central banks under less pressure to hike as economic uncertainty around the world and tightening financial conditions mount.

– Question on how central banks will navigate their paths on future rate hikes.

– ECB decision later today with consensus still seeing a 50bps hike; focus on rate path.


– New Zealand Q4 GDP Q/Q: -0.6% v -0.2%e; Y/Y: 2.2% v 3.3%e.

– Japan Feb Trade Balance: -¥897.7B v -¥1.150Te; Exports Y/Y: 6.5% v 7.0%e; Imports Y/Y: 8.3% v 12.4%e.

– Japan Jan Core Machine Orders M/M: 9.5% v 1.4%e; Y/Y: 4.5% v -3.9%e.

– Australia Mar Consumer Inflation Expectation Survey: 5.0% v 5.1% prior.

– Australia Feb Employment Change: +64.6K v +50.0Ke; Unemployment Rate: 3.5% v 3.6%e.

– China Feb New Home Prices +0.3% v 0.0% prior; Y/Y: -1.2% v -1.5% prior (MoM reading registered its first rise in 18 months).

– China Securities Regulator (CSRC) said to pause approvals for new Global Depositary Receipt (GDR) sales amid concerns that the China A-share market could be pressured.

– South Korea, Japan confirm to agree to drop WTO dispute, scrap export curbs.


– Credit Suisse [CSGN.CH] to borrowing up to CHF50B from the Swiss National Bank (SNB) under a covered loan facility and a short-term liquidity facility; to repurchase $3B in debt.

– BOE said to be in emergency talks with international counterparts amid deepening crisis at Credit Suisse.

– Saudi National Bank (SNB) [10% holder] chief Khudairy stated that Credit Suisse panic was unwarranted and regulators were ready to plug holes when they appear.


– First Republic Bank [FRC] Said to be considering strategic options including a sale.

– Atlanta Fed GDPNow raised its Q1 GDP growth forecast from 2.6% to 3.2%.

– Goldman Sachs analyst cuts US 2023 GDP growth forecast from 1.5% to 1.3%. Believe a pullback in lending will lead to substantial tightening in bank lending standards, dragging down growth already affected by tightening in recent quarters.

Speakers/fixed income/FX/commodities/erratum


Indices [Stoxx600 +0.27% at 437.63, FTSE +0.37% at 7,371.80, DAX +0.17% at 14,759.75, CAC-40 +0.18% at 6,898.39, IBEX-35 +0.58% at 8,809.73, FTSE MIB +0.31% at 25,645.00, SMI +0.44% at 10,563.10, S&P 500 Futures -0.26%].

Market focal points/key themes: European indices open higher across the board, but started to give back gains as the session wore on; all sectors start the day in the green; sectors leading the way higher include financials and consumer discretionary; lagging sectors include real estate and telecom; banking subsector supported after Credit Suisse gets support from SNB; Hurricane Energy to be acquired by Prax; focus on upcoming ECB monetary policy meeting; earnings expected in the upcoming US session include FedEx, Enel and Interational Paper.


Consumer discretionary: Deliveroo [ROO.UK] -4.5% (earnings), Currys Group [CURY.UK] -2.5% (trading update).

Energy: Siemens Energy [ENR.DE] -7.0% (placement), TotalEnergies [TTE.FR] +2.0% (divestment).

Financials: Credit Suisse [CSGN.CH] +20%, Deutsche Bank [DBK.DE] +3%, BNP Paribas [BNP.FR] +2.5% (Swiss regulator announcement to provide CS with $50B in liquidity), Investec [INVP.UK] +4.5% (trading update).

Healthcare: Pharming Group [PHARM.NL] -2.5% (earnings), Evotec [EVT.DE] +4.0% (partnership).

Industrials: Rentokil Initial [RTO.UK] +6.5% (earnings).


UK Chancellor of the Exchequer (Fin Min) Hunt confirmed Govt following the situation relating to Credit Suisse along with Bank of England (BOE). He added that news from Swiss regulators this morning was encouraging.

German Chancellor Scholz stated that it would seek to boost EU competitiveness through a series of reforms to be discussed at an EU summit in Brussels next week. Changes required included the completion of the capital market and banking union. Also needed more flexible state aid rules.

Swiss SECO Mar Economic Forecasts raised the 2023 GDP growth from 1.0% to 1.1% while cutting the 2024 GDP growth forecast from 1.6% to 1.5%. It raised the 2023 CPI outlook from 2.2% to 2.4% while maintaining the 2024 CPI from 1.5% to % which would be back below SNB’s 2.0% inflation target).

Sweden Central Bank (Riksbank) Dep Gov Floden stated that uncertainty was enormous in terms of global developments and predicting its domestic inflation. Not worried about the economic situation in Sweden. Inflation remained far too high.

Norway Feb Region Output Survey noted that activity was leveling off but seen stable through H1.

Indonesia Central Bank Policy Statement noted that its decision to keep rate steady remained consistent with stance to ensure inflation expectations ease. Believed that the current rate was sufficient to ensure headline inflation returns to target.

Bank of Korea (BOK) Member Park stated that it was considering policy pivot at all; banking sector turmoil making policy decisions harder.

China Commerce Ministry (MOFCOM) spokesperson stated that would continue to push for the relaxation of market access for foreign investment.

Currencies/fixed income

– The flows into safe-haven currencies and bond markets over concern about a potential global banking crisis eased after Credit Suisse [CSGN.CH] announced could borrow up to CHF50B from the Swiss National Bank.

– The recent turbulence seem to give central banks less pressure to hike due to the economic uncertainty around the world. The big question is how will global central banks navigate their paths on future rate hikes.

– ECB decision later today with consensus still seeing a 50bps hike; focus on rate path. The unwinding of safe-haven flows aided the EUR/USD tested the 1.0630 area in the session before drifting back to 1.06.05 by mid-session.

Economic data

– (NL) Netherlands Feb Unemployment Rate: 3.5% v 3.6% prior.

– (NO) Norway Jan GDP M/M: -0.2% v 0.3% prior; GDP Mainland M/M: -0.2% v -0.2%e.

(ID) Indonesia Central Bank (BI) left the 7-Day Reverse Repo Rate unchanged at 5.75% (as expected) for its 2nd straight pause in the current tightening cycle.

– (ES) Spain Q4 Labour Costs Y/Y: 4.2% v 4.0% prior.

– (HK) Hong Kong Feb Unemployment Rate: 3.3% v 3.3%e.

– (ES) Spain Jan Trade Balance: -€4.0B v -€4.5B prior.

(IT) Italy Feb Final CPI M/M: 0.2% v 0.3% prelim; Y/Y: 9.1% v 9.2% prelim; CPI Index (ex-tobacco): 118.5 v 118.3 prior.

– (IT) Italy Feb Final CPI EU Harmonized M/M: 0.1% v 0.2% prelim; Y/Y: 9.8% v 9.9% prelim.

– (CZ) Czech Jan Current Account (CZK): 12.7B v 14.2Be.

Fixed income issuance

– (ES) Spain Debt Agency (Tesoro) sold total €6.27B vs. €5.5-6.5B indicated range in 2028, 2033 and 2052 SPGB bonds.

– Sold €2.48B in 0.00% Jan 2028 SPGB bonds; Avg Yield: 2.983% v 2.623% prior; Bid-to-cover: 1.62x v 1.86x prior (Jan 19th 2023).

– Sold €2.17B in 3.15% Apr 2033 SPGB bonds; Avg Yield: 3.361% v 3.765% prior; bid-to-cover: 1.59x v 1.85x prior (Mar 2nd 2023).

– Sold €1.65B in 1.90% Oct 2052 SPGB bond, Avg Yield: 3.810% v 3.334% prior, bid-to-cover: 1.58x v 1.53x prior.

Looking ahead

05:50 (FR) France Debt Agency (AFT) to sell €10.5-12.0B in 2026, 2028 and 2030 bonds.

– 06:00 (GR) Greece Q4 Unemployment Rate: No est v 11.6% prior.

– 06:25 (EU) Daily ECB Liquidity Stats.

– 06:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.

– 06:50 (FR) France Debt Agency (AFT) €1.0-1.5B in inflation-linked 2029, 2036 and 2053 bonds (Oatei).

– 07:00 (UK) Office for Budget Responsibility (OBR) Spring Budget Comments/Forecasts.

– 07:00 (IE) Ireland Feb CPI M/M: No est v -0.8% prior; Y/Y: No est v 7.8% prior.

– CPI EU Harmonized M/M: No est v -1.0% prior; Y/Y (final): No est v 8.0% prelim.

– 07:00 (PT) Portugal Feb PPI M/M: No est v -0.3% prior; Y/Y: No est v 9.9% prior.

– 07:00 (BR) Brazil Mar FGV Inflation IGP-10 M/M: No est v 0.0% prior.

– 07:00 (UK) Office for Budget Responsibility (OBR) briefing on budget.

– 07:00 (RO) Romania to sell RON400M in 12-month Bills.

– 07:00 (RO) Romania to sell RON400M in 8.25% 2032 Bonds.

– 07:30 (TR) Turkey Jan House Price Index M/M: No est v 5.3% prior; Y/Y: No est v 167.8% prior.

– 07:55 (US) Daily Libor Fixing.

– 08:00 (UR) Ukraine Central Bank (NBU) Interest Rate Decision: Expected to leave Key Rate unchanged at 25.00%.

– 08:30 (US) Feb Import Price Index M/M: -0.2%e v -0.2% prior; Y/Y: -1.1%e v +0.8% prior; Import Price Index (ex-petroleum) M/M: 0.1%e v 0.2% prior.

– 08:30 (US) Feb Export Price Index M/M: -0.3%e v +0.8% prior; Y/Y: No est v 2.3% prior.

– 08:30 (US) Feb Housing Starts: 1.310Me v 1.309M prior; Building Permits: 1.343Me v 1.339M prior.

– 08:30 (US) Mar Philadelphia Fed Business Outlook: -15.0e v -24.3 prior.

– 08:30 (US) Mar New York Fed Services Business Activity: No est v -12.8 prior.

– 08:30 (US) Initial Jobless Claims: 205Ke v 211K prior; Continuing Claims: 1.71Me v 1.718M prior.

– 08:30 (CA) Canada Nov Wholesale Trade Sales M/M: +3.0%e v -0.8% prior.

– 08:30 (US) Weekly USDA Net Export Sales.

– 09:00 (PL) Poland Jan Current Account: -€0.9Be v -€2.5B prior; Trade Balance: -€1.2Be v -€2.7B prior; Exports: €27.3Be v €26.0B prior; Imports: €28.0Be v €28.8B prior.

– 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 10th: No est v $574.2B prior.

– 09:00 (PL) Poland Feb CPI Core M/M: 1.1% v 0.6% prior (Dec); Y/Y: 11.9% v 11.5% prior (Dec).

– 09:00 (UK) Daily Baltic Dry Bulk Index.

– 09:15 (EU) ECB Interest Rate Decision: Expected to raise Key Rates by 50bps; Expected to raise Main 7-day Refinancing Rate by 50bps to 3.50%. Expected to raise Marginal Lending Facility by 50bps to 3.75%. Expected to raise Deposit Facility Rate by 50bps to 3.00%.

– 09:45 (EU) ECB chief Lagarde post rate decision press conference (with Staff Projections).

– 10:30 (US) Weekly EIA Natural Gas Inventories.

– 11:00 (DK) Denmark Central Bank (Nationalbanken) typically follows ECB rate moves as the EUR/DKK is pegged).

– 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

– 12:00 (CA) Canada to sell 2 Year Bonds.

– 20:30 (SG) Singapore Feb Non-oil Domestic Exports M/M: -0.5%e v 0.9% prior; Y/Y: -15.8%e v -25.0% prior; Electronic Exports Y/Y: No est v -26.8% prior.

– 22:30 (KR) South Korea to sell KRW500B in 50-Year Bonds.

– 22:35 (CN) China to sell 3-month bills.

– 23:30 (JP) Japan to sell 3-Month Bills.