The positive tone dominates the European stock markets after the bullish closing of Wall Street with the return of calm to the markets after the latest events surrounding the Credit Suisse crisis and the messages of calm released by the institutions. Today, the Ibex, which started the day with gains that exceeded 1%, gained 2% an hour later, allowing it to overcome the psychological barrier of 9,000 points and all thanks to the attraction of the banking sector that recovers positions in a forced scenario in March .
Santander, Sabadell, BBVA, CaixaBank, Unicaja and Bankinter soared by around 4% and are the figures that stand out the most in Spanish parquet. In Europe, gains are similar across banks, allowing the Stoxx 600 banking sector to lead sectoral gains on Tuesday. Commerzbank, BNP Paribas and Unicredi stand out with increases of around 4%.
Waters return to their course in the sector after the weekend, UBS agreed to purchase Swiss credit disbursing around 3 billion euros, with the aim of “transferring” calm to investors, in a maneuver induced both by the Swiss National Bank (SNB) and by the Swiss government. This agreement came after a weekend of intense negotiations sponsored by the Swiss authorities, which thus achieved the objective of providing a solution to the entity before the start of operations in the financial market tomorrow. Switzerland points to the serious systemic risk that the omission would have entailed and recognizes that Credit Suisse has completely lost the confidence of investors and customers.
Today begins the two-day Federal Reserve meeting with maximum anticipation surrounding it. From the meeting, it is still expected that the highest US monetary authority will raise its reference interest rates by 25 basis points again – the market gives a probability of almost 75% for this movement and 25% that the Fed chooses to not increase quotes-.
“However, we believe that the most important thing will be to verify whether the crisis of confidence that the US banking sector is going through, largely related to the sharp rise in official interest rates carried out by the Fed, has modified a little the expectations that the FOMC members have about their future behavior. That is why on this occasion it will be the dot diagram, in which the members of the committee draw their expectations for the official rates, the one that will draw everyone’s attention ”, they explain from Link Gestión.
Part of the market expects the Fed to start lowering its official rates from the summer, something that, if true, should be reflected in the said diagram, at least in part, with a lower terminal rate than that reflected in December. It is equally possible, if not certain, that some members of the FOMC will opt for this new scenario.
“Otherwise, the reaction of the bond and equity markets can be significant, for the worse in the first case, and uncertain in the second. We also hope that Fed Chairman Jerome Powell, at the post-FOMC press conference, will be blunt in defending the soundness of the American banking sector and the institution’s actions to support it in these moments of doubt”, add the experts.
In the debt market, the return on the ten-year Spanish bond dropped to 3.164% and the risk premium to 104 basis points. On the other hand, in currencies, the US dollar is stable after falling overnight. It was last bought at 131.30 yen and held at 1.0711 dollars per euro. In commodity markets, choppy demand kept Brent crude futures below $80 a barrel.
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