Medicine could not stop the progression of the disease for now. Markets started the week with a marked downward trend after Credit Suisse announced that it was acquired by rival UBS for around 3,000 million euros. Neither the calm messages initiated by the European Central Bank (ECB) chief Christine Lagarde nor the joint actions of major central banks to facilitate dollar-denominated liquidity have appeased investors.
The initial market reaction in Asia was bearish as banks led the declines. Investors fear that new doubts may arise about the status of some banks after the decline of Americans. Silicon Valley Bank (SVB) and Signature Bank and the forced recovery of Credit Suiss. Also, the Swiss bank is one of 30 banks worldwide that are considered systemic, unlike the two in the US.
UBS-Credit Suisse operation articulated to avoid the vote of the shareholders of the two Swiss banksIt points to the seriousness of the bank’s situation, which appreciated well below its value in the stock market last Friday. Credit Suisse signed up for a few days permanent deposit outflow lost the confidence of the market.
U.S. futures are expected to drop at least 0.6% in a week that will also be marked by the monetary policy meetings of the Federal Reserve (Wednesday), the Bank of England and the Swiss National Bank (Thursday).
Consensus expects the Federal Reserve to raise 25 basis points, but some analysts already expect the central bank to take a hiatus due to the current banking crisis.
Source: Informacion
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