- Fresh Credit Suisse instability has roiled European bank shares and damaged optimism in the US futures market, as investors remain on edge following last week's regional-bank failures. Treasury yields rose on haven demand.
- Europe's Stoxx 600 equity index sank 2%, with a bank index falling more than 5%. Credit Suisse shares fell for the eighth consecutive session after a prominent shareholder ruled out additional aid, and the cost of default insurance on the Swiss lender's short-term debt approached distressed levels.
- The S&P 500 and NASDAQ 100 contracts fluctuated before heading lower as a rally in regional banks faded in premarket trade. The yield on the 10-Yr Treasury note declined 12 basis points. After four days of falls, the dollar strength index rose.
- Rekindled worries in the banking industry are aggravating policymakers' challenge of dealing with inflationary pressures while also ensuring financial system stability. After dropping to nearly 50-50 on Monday, swaps pricing is now setting for the Federal Reserve to raise rates by a quarter percentage point next week. On Thursday, the ECB is expected to tighten by 50 basis points.
- ECB is still leaning towards a 50 bps rate hike on Thursday given calming markets, stubborn inflation and credibility concerns - Sources.
- IEA: Much of the supply glut is due to Russian supply seeking new destinations following EU bans.
- Interest rate futures now price 50% chance of BoE not raising bank rate at the March meeting.
