Banking Crisis Adds Fuel to Gold's Engines

The collapse of the Silicon Valley Bank (SVB) on Friday brought chaos in the markets, with equity indices and government bond yields around the globe coming under strong pressure. This appeared to be the recipe of an elixir potion for gold, which rebounded strongly from near the $1,810 zone and skyrocketed. Is the metal poised […]

Eurozone Banking Sector Solid, But Softening

Summary European banks are in focus today with banking sector stocks under some pressure. In this report, we provide brief and aggregated metrics related to the stability of the Eurozone banking sector. The liquidity position of the Eurozone banking sector appears to have improved in recent years, as evidenced by a drop in the loan-to-deposits […]

Australia: Employment Bounces on Return of Workers from Summer Holidays

Total employment: +64.6k from –10.9k (revised from –11.5k); unemployment rate: 3.5% from 3.7% (unrevised 3.7%); participation rate: 66.6% from 66.5% (unrevised 66.5%). Total employment rose by 64.6k (0.5%) in February 2023, more than reversing the two consecutive monthly declines in January (–10.9k) and December (–16.6k). Accordingly, seasonally adjusted hours worked increased by 3.9% in February, […]

Resurfacing Banking Fears. ECB Still to Hike 50bp

Market movers today The main event today is the ECB meeting, where we still expect a 50bp rate hike but probably very little guidance, given the financial uncertainty, see below. The 60 second overview Fear and flight to safety dominated the trading session yesterday on concerns of the US banking turmoil spreading to Europe where […]

What Will the ECB Do?

Banks were on the chopping block on Wednesday, after Saudi National Bank’s Chairman Mr. Al Khudairy told Bloomberg TV that they wouldn’t inject more money to Credit Suisse (CS) as they already hold 9.9% of the bank and going above 10% would mean further regulatory and statutory requirements. Credit Suisse stock sold off to a […]

We Expect ECB to Stick to 50 bps Hike

Markets Tuesday’s trading session and yesterday’s Asian session both suggested that the US government & Fed’s combined measures to limit the fallout from the Silicon Valley Bank and Signature Bank’s collapse managed to restore market confidence. This lasted until Credit Suisse’s largest shareholder (Saudi National Bank) decided to put the spotlight on the troubled Swiss […]

EUR/USD – Credit Suisse Woes Knock Down Euro, Will ECB Hike Today?

The euro has rebounded on Thursday after sliding 1.5% a day earlier, its worst daily showing since September 2022. In the European session, EUR/USD is trading at 1.0613, up 0.35%. The financial markets are in turmoil, with fears growing that the Silicon Valley collapse could lead to a full-blown banking crisis. Stock markets have fallen […]

Credit Suisse Crisis Muddies ECB, EUR Putlook

A week is indeed a long time in global financial markets, and the calculus for central bank rate hikes has been dramatically altered by the SVB and Credit Suisse crises in recent days. The market’s prior foregone conclusion of a 50-bps hike by the European Central Bank has been whittled down to a coin toss […]

New Zealand Dollar Extends Losses as GDP Contracts

The New Zealand dollar has had a busy week, which is not surprising given the turmoil which has gripped the markets. NZD/USD has extended its losses on Thursday and is trading at 0.6162, down 0.40%. New Zealand GDP declines  The markets were braced for a soft GDP report for Q4, but the decline was sharper […]

Sunset Market Commentary

Markets Credit Suisse’s pre-market announcement that it plans to take up CHF 50bn offered in liquidity by the Swiss National Bank (fully collateralized) under a Covered Loan Facility as well a short-term liquidity facility helped restore confidence in the run-up to ECB policy decision. The liquidity stopgap nevertheless remains a temporary measure with structural action […]