Credit Suisse Strengthens Liquidity; U.S. Initial Jobless Claims & ECB Decision on Tap
Credit Suisse, the second largest Swiss lender, has taken decisive action to strengthen its liquidity by borrowing up to 50 billion Swiss Francs ($53.7 billion) from the Swiss National Bank. Investors sent shares in the bank crashing by as much as 30% on Wednesday, however, Credit Suisse's stock surged 32% in opening trade Thursday, rallying as the Swiss banking giant said it will tap its central bank for 50 billion francs ($54 billion) and launching an offer to buy beaten-up debt.
In addition to Credit Suisse, First Republic Bank (FRC) is also exploring options, including putting itself up for sale. FRC shares plunged 30% before the open, with other regional banks sliding, after S&P Global Ratings downgraded the regional lender's credit rating to junk status.
U.S. Initial Jobless Claims data will also be reported today, with economists estimating the figure to be 205K, compared to last week’s value of 211K.
In the U.S., the Commerce Department reported that retail sales decreased by 0.4% in the previous month, which was in accordance with the economic consensus gathered by Bloomberg. An unexpected decrease was seen in February's producer-price index, which monitors what suppliers are charging businesses, and dropped by 0.1%.
Prior to the opening of U.S. markets, the European Central Bank is expected to declare its most recent policy move. Up until recently, the expectation was that the ECB would increase rates by a half percentage point. It is now more probable that a quarter-point shift will occur. Prior to the Federal Reserve policy meeting next week, the European Central Bank has made a decision about interest rates, which may also be uncertain.
0. “Credit Suisse to borrow up to $54 billion from Switzerland's central bank” Axios, 16 Mar. 2023, https://www.axios.com/2023/03/16/credit-suisse-borrow-54-billion-switzerlands-central-bank
1. “Credit Suisse shares jump as Swiss banking giant says it will borrow from SNB and buy back debt” MarketWatch, 16 Mar. 2023, https://www.marketwatch.com/story/credit-suisse-shares-jump-after-saying-it-will-borrow-from-snb-and-buy-back-debt-27a46b20
2. “Dow Jones Futures Fall: Credit Suisse Taps Swiss National Bank; First Republic Dives On Sales Report | Investor's …” Investor's Business Daily, 16 Mar. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-rise-as-credit-suisse-taps-54-billion-from-swiss-national-bank/
3. “Stock Index Futures Mixed as Bank Jitters Weigh on Sentiment, ECB Decision in Focus” Barchart, 16 Mar. 2023, https://www.barchart.com/story/news/15111754/stock-index-futures-mixed-as-bank-jitters-weigh-on-sentiment-ecb-decision-in-focus
4. “Stock market news today: Stocks, yields fall amid Credit Suisse turmoil” Yahoo News, 14 Mar. 2023, https://news.yahoo.com/stock-market-news-today-live-updates-march-15-2023-114153589.html
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