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MNI EUROPEAN OPEN: Credit Suisse To Access SNB Liquidity Facility


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

Source: MNI - Market News/Bloomberg


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)


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)


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)


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)


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)



The People's Bank of China (PBOC) conducted CNY109 billion via 7-day reverse repos on Thursday, with the rates unchanged at 2.00%. The operation has led to a net injection of CNY106 billion after offsetting the maturity of CNY3 billion reverse repos today, according to Wind Information.

  • The operation aims to keep banking system liquidity reasonable and ample, the PBOC said on its website.
  • The 7-day weighted average interbank repo rate for depository institutions (DR007) fell to 2.0542% at 09:27 am local time from the close of 2.1218% on Wednesday.
  • The CFETS-NEX money-market sentiment index closed at 45 on Wednesday, compare with the close of 47 on Tuesday.


The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 6.9149 on Thursday, compared with 6.8680 set on Wednesday.




JAPAN FEB EXPORTS +6.5% Y/Y; MEDIAN +7.0%; JAN +3.5%
JAPAN FEB IMPORTS +8.3% Y/Y; MEDIAN +12.4%; JAN +17.5%




NEW ZEALAND Q4 GDP -0.6% Q/Q; MEDIAN -0.2%; Q3 +1.7%
NEW ZEALAND Q4 GDP +2.2% Y/Y; MEDIAN +3.3%; Q3 +6.4%



US TSYS: Cheaper In Asia, Credit Suisse Takes Action to Strengthen Liquidity

TYM3 deals at 115-02+, -0-01+, with a 0-24+ range observed thus far on volume of ~233k.

  • Cash tsys sit 2-7bps cheaper across the major benchmarks. The curve has bear flattened.
  • In early dealing a bid in Antipodean FI spilled over, in lieu of weaker than expected NZ GDP and a repricing of RBA cash rate expectations, and tsys richened in early dealing.
  • Pressure as Credit Suisse reported, link here, they are taking action to strengthen liquidity saw tsys extend losses. The bank are to borrow CHF50bn from the Swiss National Bank, as well as buying back debt securities of up to CHF3bn.
  • Tsys held cheaper through the Asian afternoon.
  • Flow wise a block seller in TU (2k lots) was the highlight.
  • Fed dated OIS pricing for March and May meetings have ticked higher in Asia, with ~30bps of hikes before a terminal rate of ~4.9% is reached. There are ~100bps of cuts priced in for 2023.
  • In Europe today the ECB's monetary policy decision headlines. We also have jobless claims, Housing Starts and Philadelphia Fed Manufacturing Index.

JGBS: Off Best Levels But Comfortably Richer

JGB futures built on the move away from overnight session (cycle) highs in early afternoon trade, with a particularly poorly received round of 20-Year JGB supply aiding that dynamic after news that Credit Suisse is entering a liquidity pact with the SNB applied pressure during the Tokyo morning. Still, the space held firmer on the day, given the general worry re: banks. JGB futures then kicked higher into the close to sit ~80 ticks firmer on the day ahead of the bell (no catalysts seen), but still reside ~85 ticks shy of post-Tokyo bests.

  • Cash JGBs run 4-11bp richer, with 7s outperforming all day given the gains in futures since yesterday’s close, while 10-Year JGB yields sit around 0.29%, trading within the recently established range after the pull away from the BoJ’s YCC cap.
  • Swap spreads are unchanged to wider, excluding 10s, where they are tighter.
  • In terms of 20-Year auction specifics, there was a wide tail and a low price that was comfortably below general expectations. That came alongside a depressed cover ratio, which printed at the lowest level seen at a 20-Year JGB auction since September’s offering. A reminder that September’s cover ratio represents the lowest level seen at a 20-Year JGB auction since ’12. The recent outright richening, ongoing market vol. and uncertainty re: BoJ Rinban purchases provided the major headwinds for takedown.
  • There wasn’t much meaningful domestic headline flow for markets to digest.
  • Looking ahead, tomorrow’s local docket is particularly light.

JGBS AUCTION: 20-Year JGB Auction Results

The Japanese Ministry of Finance (MOF) sells Y977.4bn 20-Year JGBs:

  • Average Yield: 1.079% (prev. 1.306%)
  • Average Price: 105.22 (prev. 101.48)
  • High Yield: 1.118% (prev. 1.314%)
  • Low Price: 104.55 (prev. 101.35)
  • % Allotted At High Yield: 41.4285% (prev. 88.9563%)
  • Bid/Cover: 2.846x (prev. 3.048x)

JGBS AUCTION: 12-Month Bill Auction Results

The Japanese Ministry of Finance (MOF) sells Y2.84767tn 12-Month Bills:

  • Average Yield: -0.1251% (prev. -0.0959%)
  • Average Price: 100.126 (prev. 100.096)
  • High Yield: -0.1112% (prev. -0.0859%)
  • Low Price: 100.112 (prev. 100.086)
  • % Allotted At High Yield: 45.5353% (prev. 33.7376%)
  • Bid/Cover: 3.836x (prev. 3.816x)

AUSSIE BONDS: Stronger Despite Jobs Data, Focus Shifts To ECB

ACGBs remain richer on the day (YM +24.8 & XM +10.3) but pare back morning gains in line with softer U.S. Tsys in Asia-Pac trade and stronger-than-expected employment data (+64.4k Vs. +50k expected and 3.5% unemployment rate Vs. 3.6% expected). U.S. Tsys have been pressured in Asia-Pac trade by reports that Credit Suisse was taking action to strengthen liquidity.

  • Cash ACGBs are 10-23bp stronger with the 3/10 curve +13bp.
  • AU/US 10-year yield differential +8bp at -16bp.
  • Swaps are 8-23bp richer but 3-5bp off session bests. EFPs wider.
  • Bills strip is 19-40bp richer led by whites.
  • Today’s strong employment data along with the robust NAB Business Survey should have encouraged the market to price another 25bp hike from the RBA in April given these releases were explicitly cited as important inputs to the policy decision. Nonetheless, with global banking concerns front and centre, RBA-dated OIS has continued to price an end to the tightening cycle. April meeting pricing remains at -3bp with 38bp of easing priced by year-end.
  • With no local data slated until next week, the market will remain transfixed on banking crisis headlines. With the focus, at least temporarily, shifting to European banks, all eyes will be on the ECB policy decision tonight (BBG consensus expects a 50bp hike).

Fig. 1: RBA Cash Rate & RBA Dated OIS Pricing

Source: MNI – Market News / Bloomberg

NZGBS: Off Bests Despite Weaker GDP Data

After opening stronger in sympathy with global FI developments, NZGBs add to gains on the weaker-than-expected GDP data (-0.6% Q/Q Vs. -0.2% expected) but fail to hold at best levels as U.S. Tsys and ACGBs cheapen in Asia-Pac trade. NZGBs close 9-16bp richer, but 9bp off bests with the 2/10 curve +7bp.

  • Swaps close well off richest levels with rates 13-23bp lower, implying significantly tighter swap spreads.
  • While the GDP data was weaker than analysts expected, it was much weaker than the RBNZ’s forecast of +0.7% Q/Q. On the surface, the data could be seen as supporting a tightening pause in April, but that ignores recent volatility in the data. The RBNZ is likely to want clearer signals that it has done enough in its fight against capacity constraints and inflation before halting tightening.
  • RBNZ dated OIS pricing is 10-18bp softer on the day, but 4-7bp firmer than pre-data levels. April meeting pricing shows 15bp of tightening.
  • With no antipodean data slated until next week, the market will remain transfixed on headlines associated with the global banking crisis. With the focus, at least temporarily, shifting to Europe given Credit Suisse developments, all eyes will be on the ECB policy decision tonight (BBG consensus expects 50bp hike).

EQUITIES: Higher EU Futures Help Contain Losses

Regional equities are down across the board, although we are away from worst levels for a number of indices. This largely owes to higher EU and US equity futures. EU futures are ~2% higher at his stage, thanks to Credit Suisse efforts to boost its liquidity outlook (including a CHF50bn loan from the SNB). US futures are around +0.40% for both eminis and Nasdaq futures at this stage.

  • The HSI is down roughly 1.5%, but we were down by more than 2% at one stage. Onshore shares are off by close to 0.70% for the CSI 300 and Shanghai Composite.
  • The Topix is off by ~1.30% in Japan, with the underlying bank index down over 3.6%, reversing all of yesterday's 3.3% bounce.
  • The Kospi is down slightly, with offshore selling -$305.8mn of local shares. The Taiex is down close to 1%.
  • Indian shares are trying to firm. The Nifty was weaker at the open and is 10% below Dec peaks, which puts the index in a technical correction. The Philippines index saw the same fate, with the main index off by 2% at this stage.
  • NZ shares rose 0.70%, perhaps on hopes the RBNZ tightening cycle is getting closer tot he end following today's weaker than expected Q4 GDP contraction. The ASX 200 fell by nearly 1.5%, despite robust jobs data for Feb.

GOLD: Prices Ease As CS Reassures Markets & US Yields Rise

Gold prices rose 0.8% on Wednesday and reached a high of $1937.39/oz on the back of further flight to quality flows driven by banking troubles extending across the Atlantic to Europe. During APAC trading they are down slightly and are currently trading around $1913.70. Bullion had reached a high of $1924.38 in early trading but then fell to a low of $1907.62 following a Credit Suisse report that reassured markets that it was strengthening its liquidity position. US 2-year yields rose in response which weighed on gold. The USD index is currently down slightly.

  • Bullion remains above its 50-day simple moving average. On Wednesday it cleared resistance of $1923.20 but has been unable to hold above that today.
  • Weaker-than-expected US PPI data supported gold as it tempered inflation concerns. The OIS market now has about 15bp of tightening priced in for the March 22 Fed meeting. Bullion is expected to rally above $2000/oz if the Fed pivots (bbg).
  • The ECB meets later and is expected to hike rates by 50bp but the OIS market currently has about 29bp priced in. In the US, there is only second-tier data including February housing starts/permits, trade prices, jobless claims and the Philly Fed index.

CRUDE: Crude Stabilises After Growth Fears Hit The Energy Source Hard

Oil prices are off their intraday lows and are currently up on the day, which if sustained would be the first rise since last Friday. On Wednesday crude plummeted to lows not seen since late December 2021 on concerns of a global recession. WTI is up 0.8% today and is trading just around $68.15/bbl and Brent is 0.9% higher to around $74.35.

  • While the sharp move lower in crude in recent days was driven by banking troubles, bullish positioning in the lead up to the collapse of SVB has exacerbated the move. Despite the CS announcement that it was strengthening its liquidity position, volatility in the oil market is likely to persist and banking sector developments remain the focus.
  • The IEA reported on Wednesday that it expects the oil market to remain in surplus over H1 2023, as Russian output has proved resilient. Demand in France is being reduced by striking refinery workers and US official EIA data showed another US crude stock build while products were run down. There is still optimism regarding China’s demand outlook as refining has picked up strongly in 2023.
  • The ECB meets later and is expected to hike rates by 50bp but the OIS market currently has about 29bp priced in. In the US, there is only second-tier data including February housing starts/permits, trade prices, jobless claims and the Philly Fed index.

FOREX: Yen Firmer In Asia, Credit Suisse Takes Action to Strengthen Liquidity

JPY is the standout performer in the G-10 space at the margins today in Asia. News that Credit Suisse would shore up its liquidity via a CHF50bn loan from SNB, and buy back debt securities of up to CHF3bn, saw US and European equity futures rise and the USD marginally pressured.

  • USD/JPY prints at ¥132.60/70 down ~0.6%. The pair is mostly following intra-day gyrations in US yields, albeit with yen slightly outperforming these trends. Earlier the latest round of North Korean missile launches, may have sparked some safe haven demand, but only at the margins. Data wise, the trade deficit was narrower than expectations and core machine orders printed above expectations. Support comes in at 50-Day MA (¥132.54) then ¥132.22, the low from March 15.
  • Pressure in NZD came as Q4 GDP printed below expectations at -0.6% Q/Q and much weaker than the RBNZ forecast of +0.7%. NZD/USD pared some of its losses on the Credit Suisse news. ASB revised their call for the April RBNZ meeting to a hike of 25bps.
  • AUD/USD firmed as the Australian unemployment rate printed lower than expectations. However, pressure was seen as Iron Ore slid on concerns that cuts to Chinese steel production will be cut once again as the government mandates reduced output in order to limit carbon emissions.
  • Elsewhere in G-10 CHF is ~0.3% firmer, USD/CHF prints at CHF0.9300/05, marginally paring yesterday's Credit Suisse driven weakness as USD/CHF rose 2%.
  • Cross asset wise; US Treasury Yields are firmer and S&P500 futures are up ~0.5%. BBDXY is 0.2% softer.
  • In Europe today the ECB's monetary policy decision headlines. Further out we have US Jobless Claims, Housing Starts and Philadelphia Fed Manufacturing Index.

FX OPTIONS: Expiries for Mar16 NY cut 1000ET (Source DTCC)

  • EUR/USD: $1.0610-20(E1.5bln), $1.0628-40(E1.2bln), $1.0700-15(E1.7bln)
  • GBP/USD: $1.2150-55(Gbp588mln)
  • EUR/GBP: Gbp0.8800(E829mln)
  • AUD/USD: $0.6600-25(A$1.0bln)
  • USD/CAD: C$1.3815($716mln)


16/03/20230700/0800**NONorway GDP
16/03/20230900/1000**ITItaly Final HICP
16/03/20231230/0830**CAWholesale Trade
16/03/20231230/0830**USJobless Claims
16/03/20231230/0830**USWASDE Weekly Import/Export
16/03/20231230/0830***USHousing Starts
16/03/20231230/0830**USImport/Export Price Index
16/03/20231230/0830**USPhiladelphia Fed Manufacturing Index
16/03/20231245/1345***EUECB Deposit Rate
16/03/20231245/1345***EUECB Main Refi Rate
16/03/20231245/1345***EUECB Marginal Lending Rate
EUECB Press Conference Following Rate Decision
16/03/20231430/1030**USNatural Gas Stocks
16/03/20231530/1130*USUS Bill 08 Week Treasury Auction Result
16/03/20231530/1130**USUS Bill 04 Week Treasury Auction Result
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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