MNI EUROPEAN OPEN: Credit Suisse To Access SNB Liquidity Facility

EXECUTIVE SUMMARY

• CREDIT SUISSE WILL BORROW UP TO $53.7 BILLION (WSJ)
• CREDIT SUISSE EXPOSURE TO LARGE U.S. BANKS SEEN AS MANAGEABLE (RTRS SOURCES)
• BNP STOPS ACCEPTING SWAPS REASSIGNMENTS INVOLVING CREDIT SUISSE (BBG)
• SPECULATORS BUILD $16 BILLION BEARISH BET ON EUROPE'S BANKS (RTRS)
• CHINA TELLS BOND MARKET MAKERS TO PROVIDE QUOTES, VOLUME (CAIXIN)

Fig. 1: S&P 500 E-mini Futures Vs. EURO STOXX 50 Futures

Source: MNI - Market News/Bloomberg

UK

BANKS: The Bank of England was holding emergency talks with international counterparts on Wednesday amid rising alarm at a potential financial disaster at one of Europe’s biggest banks. (Telegraph)

GILTS: Market functioning at the longer-end of the Gilt curve has improved considerably in recent months, though is still not optimal, the UK government's senior debt manager told MNI Wednesday. (MNI)

GILTS: Britain is trying to limit the burden on bond dealers as it prepares to sell the highest volume of government debt since the COVID-19 pandemic against a backdrop of turbulent markets, the head of the UK Debt Management Office (DMO) said on Wednesday. (RTRS)

FISCAL/POLITICS: Conservative Members of Parliament are worried that Jeremy Hunt’s UK budget may yet unravel. (BBG)

FISCAL/POLITICS: Jeremy Hunt faces a backlash from Tory MPs for failing to cut the tax burden, as it emerged a Treasury stealth raid would raise £120 billion over five years. (Telegraph)

FISCAL/POLITICS: Unions representing hundreds of thousands of health staff are thought to be close to agreeing a pay deal that would avert more NHS strikes. (BBC)

EUROPE

BANKS: Credit Suisse Group AG, the Swiss bank whose shares tumbled Wednesday as fears about the health of global banks jumped the Atlantic Ocean, said it would exercise its option to raise as much as 50 billion Swiss francs, equivalent to $53.7 billion, from the Swiss National Bank in a bid to stanch liquidity concerns. The firm, based in Zurich, called the decision a “decisive action to pre-emptively strengthen its liquidity.” (WSJ)

BANKS: The chairman of Credit Suisse’s largest shareholder, Saudi National Bank, told CNBC’s Hadley Gamble that the recent market turmoil in the banking sector is “isolated” and stems from “a little bit of panic.” (CNBC)

BANKS: Credit Suisse has paused its plans to expand its office space in Madrid, Financial News reports, citing unidentified people familiar with the matter. (BBG)

BANKS: BNP Paribas SA has told some clients that it will no longer accept so-called novations where BNP is asked to step in on derivatives contracts on which Credit Suisse is a counterparty, according to people familiar with the matter. (BBG)

BANKS: Short sellers had amassed bearish positions worth more than $15.7 billion against European banks by Tuesday, after the collapse of Silicon Valley Bank sparked contagion fears and sent shares plunging, according to S&P Global Market Intelligence. (RTRS)

ECB/SNB: The European Central Bank and the Swiss National Bank will still have to hike rates substantially to control inflation, despite concerns over banks, prominent Swiss economist Charles Wyplosz told MNI. (MNI)

NETHERLANDS: The upstart Farmer-Citizen Movement is set to become the biggest party in the Dutch upper house, in a stinging defeat for Prime Minister Mark Rutte and coalition parties whose environmental policies are drawing stiff opposition from the agricultural industry. (BBG)

U.S.

FED: The Federal Reserve should keep raising interest rates to ensure that borrowing costs adjusted for inflation become convincingly positive, despite banking troubles that have raised speculation about a pause in rate hikes, ex-Richmond Fed President Jeffrey Lacker told MNI Wednesday. (MNI)

FED: The Federal Reserve should pause interest-rate hikes next week to see how much demand has been shaken by market turmoil, former Boston Fed President Eric Rosengren told MNI, adding time will tell if rate hikes or cuts are appropriate. (MNI)

FED: The Federal Reserve will likely add language about market turmoil to its decision next week though it appears premature to alter the path of monetary policy itself, former top Treasury official Mark Sobel told MNI. (MNI)

FED: The U.S. central bank will launch its "FedNow" instant payment service in July, the Federal Reserve said on Wednesday, with certification and testing for early adopters starting in the first week of April. Announced in 2019, FedNow will allow banks to instantly transfer payments across the financial system. (RTRS)

BANKS: A leading U.S. bank regulator is engaging in "heightened monitoring" of national banks and coordinating with other regulators amid broader turmoil in the banking sector, according to a spokesperson. (RTRS)

BANKS: Large U.S. banks have managed their exposure to Credit Suisse in recent months and view risks emanating from the lender as manageable so far, according to three industry sources on Wednesday who declined to be identified because of the sensitivity of the situation. (RTRS)

BANKS: Credit Suisse's problems are not an indication of widespread weaknesses within the banking industry but should be closely monitored, Democratic Senator Debbie Stabenow said on Wednesday. (RTRS)

BANKS: The U.S. Treasury is monitoring the situation surrounding Credit Suisse and is in touch with global counterparts about it, a Treasury spokesperson said on Wednesday as the bank came under renewed market pressures after a major shareholder ruled out providing new capital. (RTRS)

BANKS: The biggest US banks have been whittling down their direct exposure to Credit Suisse Group AG for months as the Swiss lender stumbled from one crisis to the next. (BBG)

BANKS: First Republic Bank, the San Francisco-based lender that was cut to junk by S&P Global Ratings and Fitch Ratings on Wednesday, is exploring strategic options including a sale, according to people with knowledge of the matter. (BBG)

BANKS: Regulators at the U.S. Federal Deposit Insurance Corp (FDIC) have asked banks interested in acquiring failed lenders Silicon Valley Bank and Signature Bank to submit bids by March 17, people familiar with the matter said on Wednesday. (RTRS)

BANKS: SVB Financial Group, the company whose former subsidiary Silicon Valley Bank was taken over by U.S. banking regulators last week, is exploring seeking bankruptcy protection as one option for selling assets that include its investment bank and venture capital business, people familiar with the matter said. (RTRS)

BANKS: The U.S. government will likely only sell Silicon Valley Bank to another bank, people familiar with the matter said, essentially ruling out the private equity firms and venture capitalists that had been exploring making a bid. (The Information)

BANKS: Silicon Valley Bank is asking depositors to come back. Some may not have much of a choice. (BBG)

BANKS: Federal Reserve Chair Jerome Powell faces growing calls from key lawmakers and regulatory experts for an independent investigation into the collapse of Silicon Valley Bank, not just an internal review by the Fed board. (BBG)

BANKS: The Democratic head of the U.S. Senate Banking Committee on Wednesday said the panel would hold hearings on the bank industry's problems but that any new legislation was unlikely to pass the Republican-controlled U.S. House of Representatives. The panel's chairman, Sherrod Brown, speaking to reporters, did not give a date for any hearings but said they would provide "oversight." (RTRS)

BANKS: The United States needs "strong legislation" on banking regulation, Senate Majority Leader Chuck Schumer said on Wednesday, "hopefully" something bipartisan. He added in comments to reporters that he has faith in Treasury Secretary Janet Yellen, the U.S. Federal Reserve and President Joe Biden. (RTRS)

BANKS: A bipartisan majority of Americans oppose U.S. taxpayers footing the bill when bad management causes a bank to fail, though Republican opposition to bank bailouts has softened over the last decade, a Reuters/Ipsos poll completed on Wednesday found. (RTRS)

FINANCIALS/RATINGS: While the recent and sudden deterioration of several U.S. banks has been most impactful to the depositors, shareholders and lenders to these institutions, non-bank financial institutions, insurance companies and funds have experienced a variety of knock-on effects that, although not yet material from a rating perspective, serve to underscore the risk of financial system interconnectedness, says Fitch Ratings. (Fitch)

POLITICS: Donald Trump is extending his lead over Florida Gov. Ron DeSantis, who will likely start as the former president’s top competitor in the 2024 Republican presidential primary if he runs, according to a poll of a potential GOP field released Wednesday. (CNBC)

OTHER

GLOBAL TRADE: Brussels is to impose curbs on imports of Chinese green technologies, demoting bidders for public contracts and making it harder for buyers to access subsidies. (FT)

GLOBAL TRADE: Taiwan chipmaker TSMC's talks with the German state of Saxony about building a new factory are at an advanced stage and are now focused on government subsidies to support the investment, two people familiar with the matter said. (RTRS)

GLOBAL TRADE:The retired founder of Taiwanese chipmaker TSMC said on Thursday that he supported U.S. efforts to slow down China's progress in chip manufacturing and predicted that there would be a "bifurcation" of global semiconductor supply chains. China was five or six years behind Taiwan in chip manufacturing, Morris Chang said at an event in Taipei. (RTRS)

U.S./CHINA: US importers bore almost the entire burden of tariffs that President Donald Trump placed on more than $300 billion in Chinese goods, raising the cost of goods bought by American companies, a report by an independent US government agency found. (BBG)

U.S./CHINA: The Biden administration is demanding that TikTok’s Chinese owners sell their stakes in the video-sharing app or face a possible U.S. ban of the app, according to people familiar with the matter. (WSJ)

U.S./CHINA: Divestment doesn’t solve the problem of national security and a change in ownership would not impose any new restrictions on data flows or access, TikTok spokesperson says in an emailed statement. (BBG)

U.S./CHINA: Chinese billionaire Guo Wengui, the exiled businessman and vocal critic of Beijing with ties to former Donald Trump adviser Steve Bannon, was charged with fraud after the US seized $634 million linked to his alleged crimes. (BBG)

BOJ: Bank of Japan’s gains and losses on its asset holdings will be decided by economic, price and yield conditions at time of policy normalization, Governor Haruhiko Kuroda says in parliament. (BBG)

BOJ: New Bank of Japan Governor Kazuo Ueda will likely widen the band around the 10-year bond yield target or possibly scrap the pinpoint long-term interest rate target after the June meeting, a former BOJ chief economist told MNI. (MNI)

BOJ: The Bank of Japan’s first forecast for inflation in fiscal 2025 may be close to its 2% target as policymakers judge the long-hoped-for virtuous cycle of higher prices and wage rises may be gathering traction, a former BOJ chief economist told MNI. (MNI)

RBA: The Reserve Bank of Australia has warned that three-quarters of fixed-rate loans from early 2022 have yet to expire and the borrowers who fixed mortgage interest rates during the pandemic are more likely to be first home buyers, have larger loans relative to their incomes, and hold less equity than variable rate borrowers. (AFR)

AUSTRALIA: Australian Treasurer Jim Chalmers said on Thursday Australian banks were well capitalised and regulators were in control of the situation, after a meeting on Monday to discuss the collapse of Silicon Valley Bank. (RTRS)

AUSTRALIA/CHINA: Chinese wine industry insiders are planning trips to Australia in H1 this year on the expectation wine imports from Down Under will resume soon, according to the 21st Century Herald. (MNI)

NEW ZEALAND: The economy has continued to show its resilience despite today’s GDP figures showing a modest decline in the December quarter, leaving the Government well positioned to help New Zealanders face cost of living pressures in a challenging global environment. “The economy had grown strongly in the two quarters before this result. While GDP is likely to move around a bit as we continue to recover from Covid, our economy is nearly 6.7 percent bigger than before the start of the pandemic, ahead of most countries we compare ourselves with,” Grant Robertson said. (Stuff NZ)

SOUTH KOREA: South Korea is actively considering levying countercyclical capital buffer for banks this year, as part of efforts to manage risks preemptively, according to statement from Financial Services Commission. (BBG)

NORTH KOREA: North Korea fired an unspecified ballistic missile toward the East Sea on Thursday, Seoul's military said, hours before the leaders of South Korea and Japan are set to meet to discuss the recalcitrant regime's evolving threats and other shared challenges. (Yonhap)

CANADA/CHINA: Prime Minister Justin Trudeau tasked former Governor General David Johnston with examining allegations China interfered in Canada’s last two elections. (BBG)

BRAZIL: President Luiz Inacio Lula da Silva had a first meeting about the new fiscal framework plan and will meet again with the economic team to debate details on Friday, Finance Minister Fernando Haddad told journalists in Brasilia. (BBG)

RUSSIA: Defense Secretary Lloyd Austin spoke to his Russian counterpart on Wednesday about the destruction of a U.S. drone over the Black Sea after an encounter with Russian fighter jets, which brought the two countries closest to direct conflict since Moscow’s invasion of Ukraine a year ago. (AP)

RUSSIA: Russian Foreign Minister Sergei Lavrov said on Wednesday that the United States - in comments regarding the crashing of one of its military drones in the Black Sea - was "ignoring" the fact that Russia had established air space restrictions in the area. (RTRS)

RUSSIA: A U.S. military surveillance drone's crash into the Black Sea after being intercepted by Russian jets is being investigated, U.S. Secretary of State Antony Blinken said on Wednesday, declining to speak on the intent or the motivation behind the incident. (RTRS)

RUSSIA: France was on Wednesday accused of slowing down the European Union’s plans to replenish Ukraine’s dwindling artillery shell stocks by demanding the munitions be manufactured inside the bloc. (Telegraph)

COLOMBIA: Colombia’s inflation rate reached a peak last month and should start to fall in March, Finance Minister Jose Antonio Ocampo said in a conference in Bogota. (BBG)

ARGENTINA: Argentina’s central bank is considering raising its benchmark rate Thursday for the first time since September after annual inflation surged above 100% last month, according to two people with direct knowledge. (BBG)

WORLD BANK: The World Bank is evaluating a plan that would boost lending by $50 billion over the next decade through changes to its rules, aiming to present it at the lender’s Spring Meetings next month, people familiar with the matter said. (BBG)

OIL: The Group of Seven advanced democracies want to keep the price cap on Russian crude at $60 a barrel, according to people familiar with the matter, thwarting hopes in some European capitals of tightening the Western sanctions this month. (WSJ)

OIL: A report from the International Energy Agency shows that the price cap on Russian oil imposed by the Group of Seven rich nations and Australia is working to curtail Russian revenues, but keep markets flowing, a Treasury spokesperson said. (RTRS)

OIL: Finland, previously one of the EU states most dependent on Russian oil, halted Urals crude imports last year while increasing purchases from Norway and sourcing barrels from the UK and the United States, Refinitiv Eikon data shows. (RTRS)

CHINA

ECONOMY: China’s economy is likely to grow by 4% in Q1 this year, according to economists who reviewed yesterday’s National Bureau of Statistics (NBS) data on January/February performance, according to the 21st Century Herald. (MNI)

ECONOMY: China's electricity consumption, a key barometer of economic activity, registered a robust increase in February, as COVID-triggered disruptions gradually waned and the country's economy recovered steadily. (Xinhua)

PBOC: The probability for China to reduce its banks’ reserve requirement ratio still exists as the country has entered into a credit easing cycle, but the likelihood of an interest rate cut in the short term remains low, Shanghai Securities News reports, citing analysts. (BBG)

POLICY/EQUITIES/MARKETS: China has been actively exploring new channels, domains and models for further integrating internet technology with judicial activities, according to a white paper published Thursday. (China Daily)

MARKETS: Investors will be able to seamlessly interchange securities listed in both HKD and RMB later in H1 this year, offering a greater choice in trading currency and better liquidity for investors, according to Caixin. (MNI)

BONDS: China has told some market makers to stabilize the country’s bond market, Caixin reported, without identifying its source. (BBG)

EQUITIES: China’s securities regulator is holding up approvals for new applications to sell global depository receipts, according to people familiar with the situation, potentially choking off a lucrative stream of listings in Europe. (BBG)

BANKS: China’s listed banks are expecting more downward pressure on net interest margin this year, the Securities Daily reported Thursday citing a survey of the lenders. (BBG)

CHINA MARKETS

PBOC NET INJECTS CNY106 BILLION VIA OMOS THURSDAY

UP TODAY (TIMES GMT/LOCAL)

Date	GMT/Local	Impact	Flag	Country	Event
16/03/2023	0700/0800	**		NO	Norway GDP
16/03/2023	0900/1000	**		IT	Italy Final HICP
16/03/2023	1230/0830	**		CA	Wholesale Trade
16/03/2023	1230/0830	**		US	Jobless Claims
16/03/2023	1230/0830	**		US	WASDE Weekly Import/Export
16/03/2023	1230/0830	***		US	Housing Starts
16/03/2023	1230/0830	**		US	Import/Export Price Index
16/03/2023	1230/0830	**		US	Philadelphia Fed Manufacturing Index
16/03/2023	1245/1345	***		EU	ECB Deposit Rate
16/03/2023	1245/1345	***		EU	ECB Main Refi Rate
16/03/2023	1245/1345	***		EU	ECB Marginal Lending Rate
16/03/2023	1345/1445			EU	ECB Press Conference Following Rate Decision
16/03/2023	1430/1030	**		US	Natural Gas Stocks
16/03/2023	1530/1130	*		US	US Bill 08 Week Treasury Auction Result
16/03/2023	1530/1130	**		US	US Bill 04 Week Treasury Auction Result