In case you missed the headlines, you can check out Eamonn's posts here. Basically, we saw a takeover deal of Credit Suisse by UBS and also major central banks coming together to enhance dollar swap lines in order to bolster liquidity conditions just in case. That gave markets a bit of a lift early on but the optimism has been fading since the open. Here's a snapshot of things:
- 2-year Treasury yields +4 bps to 3.886% (was as high as 4.029% earlier)
- 10-year Treasury yields +4 bps to 3.438% (was as high as 3.519% earlier)
- S&P 500 futures +6 points or +0.15% (was as high as +31 points or +0.5% earlier)
- Dow futures flat (was as high as +0.6% earlier)
Meanwhile, the dollar opened with a gap lower against most major currencies but have seen losses trimmed to being little changed on the day now. Dollar pairs are mostly trading within 0.1% change at the moment:
With the Fed decision still the main focus, we may not see market jitters go away until we get an idea of what policymakers may offer later in the week.
And despite the positive development of Credit Suisse's takeover by UBS, there is something to be wary about as the bank's AT1 bonds are going to be written down completely. It's a sort of bankruptcy claim in a sense but while there might be questions about that, there are also opportunities. Goldman Sachs is reportedly already responding by looking to be involved with claims trading in the bonds.
The market environment remains volatile and all eyes will once again turn to Wall Street to see if there are any further news on regional banks in the US.
