Stock exchanges today March 17: 165 billion withdrawn from the Fed, Salvini attacks the ECB
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MILAN – The European Stock Exchanges become weak after a positive opening, when they were reassured by the fact that – from the USA to Switzerland – the safety net extends over the banks overwhelmed by the liquidity crisis which relieves some pressure from the sector. Yesterday Credit Suisse rebounded after the National Bank stretched 50 billion francs to shore up its financial balance, while in the United States the bailout of First Republic, a regional bank that was in danger of collapsing after the Svb crash: eleven major US banks have come to the rescue with a check for 30 billion. Today, however, the Swiss institute is heavy again. Meanwhile, the data shows that the banks have withdrawn 165 billion dollars from the two support lines opened by the Federal Reserve, a sign of how the funding of institutions is under pressure. 153 billion arrived through the traditional discount window in the week ended 15 March, a record not reached even during the 2008 crisis (111 billion) and to this must be added 12 billion withdrawn from the new Bank Term Funding Program line launched on Sunday.
It was not enough to save the Silicon Valley Bank, which at the opening of the US financial day officially started the procedures for Chapter 11, the assisted bankruptcy for a supervised reorganization. The request was filed in a New York court and aims to “preserve value”. This can be read in a note, which specifies that Svb Financial Group is no longer affiliated with Silicon Valley Bank
After yesterday’s ECB decisions, the accusations of Deputy Prime Minister Matteo Salvini arrive: “The ECB’s choices are bankruptcy in Italy and in Europe and families and businesses are paying for them, Salvini does not say so but the facts say so”. And therefore: “We hope that Mrs. Lagarde will stop her augmentation fury otherwise it will become impossible for a company or a family to ask for a mortgage”.
Svb holding initiates bankruptcy
SVB Financial Group initiates Chapter 11 assisted bankruptcy proceedings for a supervised reorganisation. The request was filed in a New York court and aims to “preserve value”. This can be read in a note, which specifies that Svb Financial Group is no longer affiliated with Silicon Valley Bank.
Stock Exchanges turn red
The European stock exchanges all veered into negative territory in the wake of the new collapse of Credit Suisse which lost about 11% in the middle of the session and returned below the 2 franc level. The stock market crash of the Swiss bank chills the enthusiasm of the markets which had raised their heads after the rescue plan put in place for First Republic Bank in the United States, and the ‘life preserver’ launched in Switzerland at Credit Suisse. Paris loses 0.50%, Frankfurt falls 0.73% and London loses 0.49%. In Piazza Affari, the Ftse Mib leaves 0.85% on the ground.
Mixed markets, Credit Suisse is back in sharp decline
After a positive open, European stocks turned mixed, with Credit Suisse again down sharply. Paris loses 0.19%, Frankfurt loses 0.10%, Madrid falls by 0.22%. Milan is just below parity and London registers an increase of 0.16%. Credit Suisse shares fell despite the massive financial aid from the central bank announced Wednesday to give breathing space to the second largest bank in the country and reassure the markets: it is currently down 7.86% at 1.863 Swiss francs.
The EU stock markets start up, tension on the banks eases
A rising start for the European stock exchanges which catch their breath thanks to the easing of tensions on the banking system, after the rescue plan put in place for the First Republic Bank in the United States, and the ‘life preserver’ launched in Switzerland at Credit Suisse. After days of turbulence, the market seems to have regained confidence but some uncertainty still persists. Investors interpreted yesterday’s ECB decision in a dovish sense, which raised rates by half a point as expected but did not provide precise indications on future moves. In early trading, Paris’ Cac 40 rose by 0.76% to 7,079.11 points, Frankfurt’s Dax 30 rose by 0.93% to 15,105.45 points and London’s FTSE 100 recorded an increase of 0.92 % to 7,478.25 points. In Piazza Affari, the Ftse Mib starts up by 0.87%.
Euro up after the ECB
Euro opens higher above $1.06 after ECB decision to raise its key rate by 50 basis points, continuing its fight to tame inflation despite signs of stress in the financial system from previous rate hikes . However, the bank removed any references to further rate hikes from its statement accompanying its monetary policy decisions, a significant change from its previous message. The single currency changed hands at 1.0646 dollars and fell against the Japanese currency at 141.51. The greenback lost ground after the authorities and banks moved to relieve tensions on the financial system, thus sapping the currencies considered safe-haven assets. Yesterday’s intervention to bail out the First Republic Bank in the US boosted risk appetite globally as fears of a global banking crisis eased, giving way to a traditionally avoided rally in the Australian and New Zealand dollars during periods of risk aversion. The dollar retreats against the yen to 132.94.
Closing up for Tokyo: +1.2%
The Tokyo Stock Exchange closed the session sharply higher, with the Nikkei 225 gaining 1.2% to 27,333.79 points.
Mixed futures on European stock exchanges
A mixed start is expected for the European stock exchanges despite the easing of tensions on the banking system following the intervention of the US authorities on Svb and Signature Bank, the rescue plan put in place for First Republic Bank, and the ‘life preserver’ launched in Switzerland to Credit Suisse. After days of turbulence, the market seems to have regained serenity but a strong uncertainty still persists. Investors interpreted yesterday’s ECB decision in a dovish sense, which raised rates by half a point as expected but did not provide precise indications on future moves. Futures of the Eurostoxx 50 drop by 0.99%, those of the London FTSE 100 rise by 0.71% and those of the Paris Cac 40 grow by 0.19%. Frankfurt’s Dax futures are up sharply, posting 0.32% while those of Milan’s Ftse Mib are down 0.80%.
Positive closure for the Chinese stock exchanges
Chinese stocks closed the session higher, with the Shanghai Composite gaining 0.73% to 3,250.55 points and the Shenzhen Component 0.36% to 11,278.05 points.
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