European stock exchanges closed the session sharply higher, after central bank reassurances about a 3 billion franc bailout of Credit Suisse by Ubs. Milan leads the league thanks to the good results of Banks. Ubs is also growing in the stock market, posting the biggest rise since March 2020. Investors’ attention is focused on the Fed’s two-day meeting and especially on the interest rate decision announcement, expected on Wednesday March 22nd. Currently, Fed Fund futures see a gain of 25 basis points likely at 76.8%, while maintaining the status quo at 23.2%. Uncertainty remains high however after a Credit Suisse bailout appears to have calmed fears of contagion, but a writedown of AT1 bonds is helping to stoke jitters in the financial sector. On the macro front, however, the most important data is Germany’s Zew Sentiment in March, which is expected to slow to 17.1 points from 28.1 in February.
UBS stock jumps in the stock market
UBS is heading to the Zurich stock exchange, with investors convinced that the Swiss institution has done a lot in acquiring Credit Suisse for 3 billion francs, after canceling 16.3 billion of junk bonds and taking out 9 billion in guarantees on any of them. Losses that may arise from the balance sheet of the “cousins”. Today the stock jumped 12.1% to 19.425 francs: in two sessions, capitalization rose by about 8 billion francs to 68.5 billion.
European stock markets are recovering
Milan closed at +2.53%, with Frankfurt +1.75%, London +1.79% and Paris up +1.42%. The listings are supported by the banking and energy sectors. European banks are flying after the collapse of the previous sessions with fears of contagion risks stemming from the events of US credit institutions and Credit Suisse. The Stoxx 600 Banking Index closed the session up by 7.31%. In the lead Commerzbank and Unicredit. Piazza Affari continues to manage and lead other European stock exchanges thanks to bank stocks, with Unicredit (+6.96%), Fineco (+5.41%), Bper (+4.89%) and Mps (+2.75%) leading the gains with Saipem (+7.57%), Tenaris (+3.36%) and Leonardo (+2.94%).
Positive closing of Asian stock exchanges
Even Asian stock markets – minus Tokyo closed for the holidays – closed the session in positive territory. At1 bonds issued by Asian banks rebounded to record highs after the previous day’s crash. Seoul closed +0.4%. Hong Kong also ended the session higher: the Hang Seng Index jumped 1.36%, to settle at 19,258.76 points.
Gold, oil and currencies
The prospect of a slowdown in monetary policy tightening by the US central bank punishes the dollar and pushes gold higher. Spot delivery rose 0.2% to $1,982.29 an ounce, while futures rose 0.1% to $1,984.30. After opening lower, the price of oil is up again: WTI is traveling at $68.60 a barrel (+1.4%) and Brent at $74.65 (+1.2%). Utilities are ahead (+1%), with gas less than €40 per MWh. In Amsterdam, prices have fallen by 48% since the beginning of the year. In the foreign exchange market, the euro rose to 1.0781 against the dollar.
to know more
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Credit Suisse, stocks, bonds and guarantees: what to know about the crisis and the bailout
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Ubs-Credit Suisse, Switzerland is now fragile (and full of mysteries)
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UBS and the acquisition of Credit Suisse: that’s why it was the “deal of life”
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