Credit Suisse joins the party
16 March 2023
Another bank has fallen prey to the market turmoil, as Credit Suisse made headlines yesterday following the announcement by its biggest Saudi shareholder that it would cease financing the Swiss bank. This triggered a significant sell-off, but Swiss regulators and the National Bank stepped in to provide assistance, ensuring that Credit Suisse will not collapse. However, traders remain cautious about which bank will be next to falter.
Despite the positive news about Credit Suisse, the markets did not experience a rapid reversal, with only a slight pause in the aggressive slide. This lack of momentum can be attributed to traders' fears that other banks may follow suit, given for example the previous concerns about Deutsche Bank. Today, the focus is on the ECB's rate decision, with market participants anticipating a 50bp rise. However, the recent issues with SVB and Credit Suisse may give the ECB cause for second thoughts.
In other news, the job data from Australia released overnight came in better than expected and stronger than the previous month, causing AUD to be one of the strongest currencies on the market. Meanwhile, gold continues to trade close to yearly highs, while oil prices are plummeting. WTI and Brent have hit new yearly lows, with WTI breaking below the psychological barrier of 70 USD/bbl. The next support and target is at 62USD/bbl, which many traders would likely welcome.