Credit Suisse Strengthens Liquidity; U.S. Initial Jobless Claims & ECB Decision on Tap
By 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.[0] 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.[1]
In addition to Credit Suisse, First Republic Bank (FRC) is also exploring options, including putting itself up for sale.[2] 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.[2]
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.[3]
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.[4] An unexpected decrease was seen in February's producer-price index, which monitors what suppliers are charging businesses, and dropped by 0.1%.[4]
Prior to the opening of U.S. markets, the European Central Bank is expected to declare its most recent policy move.[2] Up until recently, the expectation was that the ECB would increase rates by a half percentage point.[2] It is now more probable that a quarter-point shift will occur.[2] 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.[2]
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
