MNI EUROPEAN OPEN: RESEND: Budget Day In The UK

EXECUTIVE SUMMARY

• FED LIKELY TO HIKE 25BPS NEXT WEEK - EX OFFICIAL (MNI)
• FED'S BOWMAN SAYS BANKING SYSTEM REMAINS RESILIENT (MNI)
• FED TO CONSIDER TOUGHER RULES FOR MIDSIZE BANKS AFTER SVB, SIGNATURE FAILURES (WSJ)
• SIGNATURE BANK FACED CRIMINAL PROBE AHEAD OF FIRM’S COLLAPSE (BBG)
• HUNT TO UNVEIL ‘BUDGET FOR GROWTH’ WITH BILLIONS PLEDGED FOR BUSINESS (FT)
• JAPAN'S BIG FIRMS OFFER LARGEST PAY RISES IN DECADES (RTRS)
• BOJ'S UEDA TO WAIT AND WATCH AS 10-YR YIELD SINKS (MNI)

Fig. 1: U.S. KBW Bank Index

Source: MNI - Market News/Bloomberg

UK

FISCAL: Jeremy Hunt will on Wednesday announce billions of pounds to boost business investment and measures to bolster Britain’s workforce, including a big expansion in childcare, in a “Budget for growth”. The chancellor has pledged that business will be the main beneficiary of any tax cuts in his Budget, but he is constrained by a tough fiscal backdrop and a vow to hold down spending to tame inflation. (FT)

FISCAL: A £4bn expansion of free childcare for one- and two-year-olds in England is expected to be announced in the budget on Wednesday as part of a wider drive to help people into work and boost growth. (Guardian)

FISCAL: Jeremy Hunt will deliver his maiden Budget on Wednesday against a backdrop of falling global inflation and lower predicted borrowing costs as pressure grows for him to abandon a tax raid. (Telegraph)

BREXIT: The leader of Northern Ireland’s main unionist party has called for “further clarification, reworking and change” to the new post-Brexit trade deal for the region agreed by London and Brussels after months of wrangling. (FT)

EUROPE

BANKS: Intesa Sanpaolo (ISP.MI) is not offering higher remuneration on its retail deposits and has only moved to pass on higher interest rates to its key corporate customers, its finance chief told investors on Tuesday according to a person who attended the meeting. (RTRS)

BONDS: A historic dash into safe-haven government bonds following the collapse of U.S. lender Silicon Valley Bank (SVB) last week will prove short lived, one of Europe's biggest bond investors said on Tuesday. (RTRS)

U.S.

FED: The Federal Reserve will likely approve a quarter-point interest rate increase next week as focus shifts from strong economic data to restoring confidence in the banking system, former senior Bank for International Settlements official and ex-New York Fed research director Stephen Cecchetti told MNI. (MNI)

FED: A Fox reporter tweeted the following on Tuesday: “@federalreserve is likely to tighten another 25 bps despite sentiment Powell will hold amid SBV implosion/lower inflation, bank CEOs tell @FoxBusiness. Reason: 6% CPI is still too high & holding rates would be an indication of serious systemic flaws in the banking system.” (MNI)

FED/BANKS: The U.S. banking system remains resilient and on a solid foundation, Federal Reserve Governor Michelle Bowman said Tuesday, in a speech days after after the collapse of Silicon Valley Bank and Signature Bank. (MNI)

FED/BANKS: Senate Banking Chairman Sherrod Brown said Tuesday that he sees little chance Congress will tighten bank regulations following the collapse of Silicon Valley Bank and Signature Bank, and is urging the Federal Reserve to act unilaterally to impose tougher regulations and pause interest rate increases. (BBG)

FED/BANKS: The Federal Reserve is rethinking a number of its own rules related to midsize banks following the collapse of two lenders, potentially extending restrictions that currently only apply to the biggest Wall Street firms. A raft of tougher capital and liquidity requirements are under review, as well as steps to beef up annual “stress tests” that assess banks’ ability to weather a hypothetical recession. (WSJ)

BANKS: The Securities and Exchange Commission and the Justice Department are investigating how Silicon Valley Bank became the second largest bank failure in U.S. history, NBC News reported Tuesday. (CNBC)

BANKS: The largest U.S. banks didn’t submit a bid for Silicon Valley Bank over the weekend, largely because they were initially excluded from the sales process by the Federal Deposit Insurance Corp. and ran out of time as a result, people familiar with the matter said. (Semafor)

BANKS: Troubled lender SVB Financial Group said on Tuesday Goldman Sachs Group Inc had bought its bond portfolio before federal regulators took the bank into receivership. (RTRS)

BANKS: The world’s largest private investment firms are exploring the purchase of loans from the remains of Silicon Valley Bank after the collapse of the tech-focused lender last week. (FT)

BANKS: Creditors of Silicon Valley Bank’s parent company have formed a group in anticipation of a potential bankruptcy filing, through which they hope to profit from a sale of the collapsed firm’s private-wealth and other units, according to people familiar with the matter. (WSJ)

BANKS: Silicon Valley Bank’s lack of a chief risk officer for much of last year is being examined by the Federal Reserve as part of its probe of the bank’s failure, two people familiar with the matter said. (BBG)

BANKS: US prosecutors were investigating Signature Bank’s work with crypto clients before regulators suddenly seized the lender this past weekend, according to people familiar with the matter. (BBG)

BANKS: The White House is carefully monitoring developments at First Republic and other smaller banks after actions to protect depositors following the collapse of Silicon Valley Bank (SVB) last week, an official said on Tuesday. (RTRS)

BANKS: Both parties are drawing battle lines over the collapses of Silicon Valley Bank and Signature Bank, while acknowledging regulatory reform faces a steep — if not impossible — climb in Congress. (Axios)

BANKS: The government should temporarily insure every bank deposit in the country to shore up confidence in the U.S. financial system, a senior GOP lawmaker said Tuesday. (POLITICO)

BANKS: A group of Democrats led by Sen. Elizabeth Warren of Massachusetts and Rep. Katie Porter of California will unveil legislation Tuesday to restore bank regulations that were undone under then-President Donald Trump in 2018, seeking to fix what they say was the cause of Silicon Valley Bank's collapse. (NBC)

BANKS: Sen. Jon Tester (D-Mon.) called on the Federal Reserve and federal regulators to “claw back” bonuses that were reportedly paid to Silicon Valley Bank executives just hours before the federal government took over the now-defunct bank. (The Hill)

BANKS: The chief executive of Charles Schwab, a bank and brokerage, said the company has ample liquidity, moving to allay concerns about a "doomsday scenario" that has weighed broadly on bank stocks after the failure of two U.S. lenders since Friday. "We have not raised capital and we are not in the market at this point for M&A transactions," Walt Bettinger, the chief executive of Charles Schwab, told Reuters in an interview on Tuesday. (RTRS)

BANKS: Regional lender Comerica Inc on Tuesday said it has a more diverse, stable and "sticky" deposit base and it remains well capitalized and highly liquid. (RTRS)

BANKS: Bank of America Corp. mopped up more than $15 billion in new deposits in a matter of days, emerging as one of the big winners after the collapse of three smaller banks dented confidence in the safety of regional lenders. (BBG)

BANKS/RATINGS: First Republic Bank was placed on credit watch negative by S&P Global Ratings after the government closed two other lenders in the past week, adding to worries about volatile deposit flows. (BBG)

FISCAL: The Federal Deposit Insurance Corp said its withdrawal of a record $40 billion in U.S. Treasury Funds on Friday as it seized control of Silicon Valley Bank will not affect when the Treasury runs out of operating room under the debt ceiling. (RTRS)

EQUITIES: Apple Inc. is delaying bonuses for some corporate divisions and expanding a cost-cutting effort, joining Silicon Valley peers in trying to streamline operations during uncertain times, according to people with knowledge of the situation. (BBG)

OTHER

GLOBAL TRADE: Talks continue to extend a deal to allow grain shipments from Ukraine's Black Sea ports ahead of a deadline later this week, the United Nations and Turkey said on Tuesday, after Kyiv rejected a Russian push for a reduced 60-day renewal. (RTRS)

U.S./CHINA: TikTok’s leadership is discussing the possibility of separating from ByteDance Ltd., its Chinese parent company, to help address concerns about national security risks. (BBG)

U.S./CHINA/TAIWAN: Representative Ken Calvert, Tom Cole, Steve Womack, Dave Joyce, Edward Case and Mike Garcia will visit Taiwan Wednesday and Thursday as part of a visit to the region, according to a statement from American Institute in Taiwan, the US’s de facto embassy in Taipei. (BBG)

BOJ: The fall in Japan's 10-year bond rate could make it easier for the Bank of Japan to tweak its yield curve control policy, though incoming governor Kazuo Ueda is unlikely to change policy in April given volatility triggered by the collapse of Silicon Valley Bank and a desire to establish good relations with the government, MNI understands. (MNI)

BOJ: Outgoing Bank of Japan Governor Haruhiko Kuroda said on Wednesday that the BOJ continues to carefully monitor the impact of the collapse of Silicon Valley Bank on financial markets. (MNI)

BOJ: Many Bank of Japan board members assessed the BOJ needed more time to examine the effects of December's modification of its yield curve control policy on market functioning at the January 17-18 meeting, the minutes released Wednesday showed. (MNI)

JAPAN: Japan's top companies offered their largest pay increases in a quarter century on Wednesday, as the outcome of annual labour talks showed Japan Inc heeding Prime Minister Fumio Kishida's calls for higher wages to counter a surge in inflation. (RTRS)

JAPAN: Japan's banking sector won't face incidents similar to the collapse of U.S. lender Silicon Valley Bank due to differences in the structure of bank deposits, Finance Minister Shunichi Suzuki said on Wednesday. (RTRS)

AUSTRALIA: Australia’s slowing economy and rising interest rates are likely to drive higher housing and business loan losses for banks, regulators said, while adding that lenders’ “unquestionably strong” capital requirements mean they can withstand any shock. (BBG)

AUSTRALIA: Households will face power price rises of up to 23.7 per cent and businesses up to 25.4 per cent from July 1 under the Australian Energy Regulator’s draft electricity “safety net” prices for next financial year. (AFR)

NEW ZEALAND/RATINGS: New Zealand’s credit grades with S&P Global Ratings could come under pressure if the nation’s current account deficit remains too big. (BBG)

SOUTH KOREA: South Korea will create the world's largest semiconductor cluster in the Seoul metropolitan area by attracting 300 trillion won (US$229.81 billion) in investments as part of efforts to secure a competitive edge in the sector, the industry ministry said Wednesday. (Yonhap)

SOUTH KOREA/JAPAN: South Korean President Yoon Suk Yeol said on Wednesday that cooperation with Japan is vital in confronting North Korea's growing threats and protecting global supply chains, calling on both countries to not snarl relations in domestic politics. (RTRS)

CANADA: Canada’s financial institutions are stable and resilient, the country’s Finance Minister Chrystia Freeland says in a statement. (BBG)

MEXICO: Mexico's regional economies face a "difficult context" for growth going forward despite a general expectation for continued recovery, a senior official at the country's central bank said in a webcast presentation on Tuesday. (RTRS)

BRAZIL: “Meeting of the budget board should take place this week and we are going to start analyzing the fiscal framework proposal that will be presented by Finance Minister Fernando Hadadd,” Brazil Chief of Staff Rui Costa told journalists after a cabinet meeting in Brasilia. (BBG)

BRAZIL: An executive at Brazilian state development bank BNDES said on Tuesday the bank aims to pay out the equivalent of 2% of the country's Gross Domestic Product (GDP) by 2026. (RTRS)

RUSSIA: A U.S military MQ-9 surveillance drone crashed into the Black Sea on Tuesday after being intercepted by Russian fighter jets, in the first such incident since Russia's invasion of Ukraine over a year ago. (RTRS)

RUSSIA: Ukraine's top military command is unanimously in favour of defending the sector of eastern Ukraine, including the besieged city of Bakhmut, and inflicting maximum losses on the enemy, President Voldoymyr Zelenskiy said on Tuesday. (RTRS)

RUSSIA: A group of senators from both parties is pressing the Pentagon for more information on what it would take to send F-16 jets to Ukraine. (POLITICO)

RUSSIA: On Friday, John Kirby, the spokesperson for the National Security Council, made a surprise announcement at a White House press briefing. U.S. intelligence, he said, had determined that the Kremlin was plotting to topple another European democracy. “Russian actors, some with current ties to Russian intelligence, are seeking to stage and use protests in Moldova as a basis to foment a manufactured insurrection against the Moldovan government,” Kirby declared. (Yahoo)

SOUTH AFRICA: We expect the South African government's planned South African rand (ZAR) 254 billion ($14 billion) debt relief agreement will address Eskom's near-term debt obligations once implemented and give Eskom room to focus on operational improvements and electricity sector reform targets.(S&P)

COLOMBIA: Colombia’s government is proposing to redirect the pension contributions of millions of workers away from private managers and into the public system, while setting up a fund intended to neutralize the impact this would have on the local bond market. (BBG)

ENERGY: Russian President Vladimir Putin said on Tuesday (Mar 14) that last year's blasts on the Nord Stream gas pipelines had been carried out on a "state level", dismissing the idea an autonomous pro-Ukraine group was responsible as "complete nonsense". (CNA)

METALS: Peruvian mining exports dropped 19.8% in January compared to the same month last year, the sector’s business chamber said on Tuesday, in the wake of devastating protests that have rocked the country in recent months. (RTRS)

OIL: Uncertainty in the global economy is limiting “clarity” about the outlook for oil markets and means the “sensible and only course of action” for Opec-plus is to stick to the production pact agreed last October, Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview with Energy Intelligence this week. The minister also commented on market interventions by consumer nations such as the G7 price cap on Russian oil and the proposed Nopec bill in the US, and on tight global oil production capacity. (Energy Intelligence)

OIL: En route to New Delhi this month, US officials proclaimed themselves satisfied that India is buying Russian oil below G-7 price caps designed to undercut Moscow’s war in Ukraine without disrupting global energy flows. (BBG)

CHINA

ECONOMY: China's employment is basically stable and a rise in the jobless rate for February is due to seasonable factors, Fu Linghui, spokesperson for the National Bureau of Statistics (NBS), said on Wednesday. (RTRS)

ECONOMY: The China Banking and Insurance Regulatory Commission (CBIRC) said risks were “generally controllable” and the economy was recovering rapidly with the financial system operating smoothly, according to a read-out of the first leadership meeting since the Two Sessions. (MNI)

ECONOMY: Shanghai will take measures to support trade, consumption and investment to secure the economic rebound, according to a recent leadership meeting. (MNI)

ECONOMY: It’s “very likely” that China’s leisure travel market will be better in 2023 than 2019, Accor Chief Executive Officer Sebastien Bazin said in an interview with Bloomberg TV on Wednesday. (BBG)

YUAN: China's foreign exchange regulator said on Friday it would continue to maintain prudent operation and healthy development of the country's FX market, while fending off external shocks and risks. The State Administration of Foreign Exchange (SAFE) also reiterated that the regulator would guarantee the safety, liquidity and value of China's FX reserve assets, it said in a statement on its website. (RTRS)

PBOC: China's central bank said on Wednesday that it would step up financing support for private micro- and small-enterprises, according to a statement released on its website. The People's Bank of China will support reasonable bond financing needs for private companies, the central bank said in the statement after a work meeting. (RTRS)

PBOC: The People’s Bank of China said it will respond in an appropriate way to US measures to contain China, echoing a call from President Xi Jinping to defend the economy against external threats. (BBG)

PENSIONS: China will introduce further reform measures this year to boost national pension planning, raise pension levels and expand the inclusivity of pension supply, according to Yicai.com. (MNI)

BONDS: China’s bond trading was disrupted on Wednesday morning after the regulator reportedly told money brokers to suspend their data feeds amid security concerns. (BBG)

CHINA MARKETS

PBOC NET INJECTS CNY381 BILLION VIA OMOS WEDNESDAY

UP TODAY (TIMES GMT/LOCAL)

Date	GMT/Local	Impact	Flag	Country	Event
15/03/2023	0700/0800	***		SE	Inflation report
15/03/2023	0745/0845	***		FR	HICP (f)
15/03/2023	1000/1000	**		UK	Gilt Outright Auction Result
15/03/2023	1000/1100	**		EU	Industrial Production
15/03/2023	1100/0700	**		US	MBA Weekly Applications Index
15/03/2023	-			UK	Chancellor Delivers Spring Budget, OBR Forecasts, Likely DMO Remit
15/03/2023	1215/0815	**		CA	CMHC Housing Starts
15/03/2023	1230/0830	***		US	Retail Sales
15/03/2023	1230/0830	***		US	PPI
15/03/2023	1230/0830	**		US	Empire State Manufacturing Survey
15/03/2023	1300/0900	*		CA	CREA Existing Home Sales
15/03/2023	1400/1000	*		US	Business Inventories
15/03/2023	1400/1000	**		US	NAHB Home Builder Index
15/03/2023	1430/1030	**		US	DOE Weekly Crude Oil Stocks
15/03/2023	2000/1600	**		US	TICS