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West Texas Intermediate U.S. crude futures fell 70 cents, or 1%, to $69.26 a barrel. Brent futures rose 2.8% in the week while U.S. crude futures rose 3.8%. The dollar rose 0.6% against other currencies, which also pressured oil, making crude more expensive to holders of other currencies. Goldman Sachs said commodities demand was surging in the world's biggest oil importer, with oil demand topping 16 million bpd. That means Russia aims to produce 9.7 million bpd between March and June, according to Novak, a much smaller output cut than Moscow previously indicated.

☆ Wall Street downgrades European banks and names stocks to buy 'in case markets turn sour'
▼ + stars: | 2023-03-24 | by ( Ganesh Rao | ) www.cnbc.com time to read: +2 min

Wall Street is downgrading European banks after stresses in the sector led to the emergency merger of the two largest lenders in Switzerland. The bank's strategists said — in a report titled "A dozen stocks in case markets turn sour" — their list of 12 buy-rated stocks would prove resilient during broad market sell-offs. The list includes companies such as Nokia , Sodexo , and SAP among others that strategists at Deutsche Bank Research said could outperform broader markets during recessionary environments. Meanwhile, they said that Sodexo's defensive growth profile is also expected to lead to top-line growth of 8-10% this year. Deutsche strategists Maximilian Uleer and Caroline Raab added that the German tech giant SAP had finished its costly cloud investments and is now starting to see benefits from the transformation.

☆ Deutsche Bank shares slide 9% after sudden spike in the cost of insuring against its default
▼ + stars: | 2023-03-24 | by ( Elliot Smith | ) www.cnbc.com time to read: +1 min

A logo stands on display above the headquarters of Deutsche Bank AG at the Aurora Business Park in Moscow, Russia. Deutsche Bank shares fell by more than 9% in early trade on Friday following a spike in credit default swaps on Thursday night, as concerns about the stability of European banks persisted. Credit default swaps — a form of insurance for a company's bondholders against its default — leapt to 173 basis points on Thursday night from 142 basis points the previous day. Deutsche led broad declines for major European banking stocks on Friday, with Commerzbank , Credit Suisse , Societe Generale and UBS all falling more than 5%. After completing a multibillion euro restructure that began in 2019, with the aim of reducing costs and improving profitability, Deutsche Bank has reported 10 straight quarters of profit.

The index of top European banks (.SX7P) was down 1% in early trading, with German banking giants Deutsche Bank (DBKGn.DE) and Commerzbank (CBKG.DE) both falling 0.8%. The rescue of Credit Suisse, which followed the collapses of California-based Silicon Valley Bank (SVB) (SIVB.O) and New York-based Signature Bank (SBNY.O) ignited broader concerns about investors' exposure to a fragile banking sector. The decision to prioritise shareholders over Additional Tier 1 (AT1) bondholders rattled the $275 billion AT1 bond market and some Credit Suisse AT1 bondholders are seeking legal advice. "The AT1 instruments issued by Credit Suisse contractually provide that they will be completely written down in a 'viability event', in particular if extraordinary government support is granted," FINMA said. However, some watchers think the banking system is more vulnerable to rumour and rapid moves in an era of widespread social media use, posing a challenge for regulators trying to tamp down instability.

☆ Citigroup downgrades European Banks, sees STOXX 600 little changed by year-end
▼ + stars: | 2023-03-23 | by ( ) www.reuters.com time to read: +1 min

The Wall Street brokerage cut its rating on European banks (.SX7P) to "neutral" from overweight" in a note dated Wednesday, saying the likely continued monetary policy tightening adds to worries stemming from the turmoil in the global banking sector. They, instead, prefer technology stocks (.SX8P) and upgraded the sector to "overweight", citing healthy cash balances and several growth drivers. Citigroup trimmed its 2023 year-end forecast for the pan-European STOXX 600 (.STOXX) index by more than 5% to 445 points, which represents a 0.4% downside from current levels. Citi also cut its forecast for UK's FTSE 100 index (.FTSE) by 5%, now expecting the blue-chip index to end the year at 7,600 points, less than 1% higher from current levels. The STOXX has risen 5.24% so far this year, while the FTSE 100 has gained 1.54%.

☆ European lawmakers are quietly miffed at U.S. regulators over SVB's collapse
▼ + stars: | 2023-03-23 | by ( Silvia Amaro | ) www.cnbc.com time to read: +1 min

Chair of the ECB Supervisory Board Andrea Enria and Chairperson of the European Banking Authority (EBA) Jose Manuel Campa in the European Parliament on March 21, 2023. And in Switzerland, a non-member of the European Union, authorities had to rescue Credit Suisse by asking UBS to step in with an acquisition. Meanwhile, regulators and officials across the European Union have been nervous about potential contagion to their own banking sector. After all, it's not been that long since European banks were in the depths of the global financial crisis. Like him, an array of officials have made an effort to stress that the European banking system is in much better share compared to 2008.

Britain and Norway hiked rates by 25 bps each, the Swiss National Bank jacked up rates by 50 bps. The European Central Bank hiked rates by 50 bps a week ago. ClearBridge strategist Jeffrey Schluze said, European banking regulation since the global financial crisis has been more stringent than in the United States, making the outlook for European lenders relatively strong. While banking stocks have been battered globally, the S&P 500 is up 0.5% this month (.SPX), while Europe's STOXX 600 index down 3.2% (.STOXX). CHANGE IN TONEBefore the banking turmoil, markets were driven by one-way moves as high inflation pressured U.S. and European markets.

☆ Morning Bid: Leaning back to Fed hike, UK inflation jolt
▼ + stars: | 2023-03-22 | by ( ) www.reuters.com time to read: +5 min

Two weeks of U.S. and European banking stress and failures leaves the Federal Reserve and other major central banks in the unenviable position of choosing between stabilising financial systems and fighting still historically high inflation. On top of that, the latest quarterly economic projections from Fed policymakers may reveal a big dispersion of views. Beyond the Fed, the dire UK inflation reading seems to have solidified expectations of another BoE rate rise on Thursday and a further move later in the year. If nothing else, it underlines in red ink just how all central banks are totally dependent now on incoming data evidence on what's happening in the real economy. With the U.S. dollar lower across the board ahead of the Fed meeting, sterling hit its highest level since early February.

☆ Goldman’s Oppenheimer says stocks will stay ‘fat and flat’ — and reveals how to trade it
▼ + stars: | 2023-03-21 | by ( Zavier Ong | ) www.cnbc.com time to read: +3 min

But stock markets are not out of woods yet, according to Goldman Sachs Chief Global Equity Strategist Peter Oppenheimer. He believes contagion fears around the banking sector are just one of several risk factors afflicting stocks, and predicts the market will remain "fat and flat" in the near term. He said U.S. stocks continue to look stretched and offer "very little return," while cash and short-duration debt looks "very attractive" relative to stocks. How to trade it Despite uncertainty in the European banking sector, Oppenheimer believes European stocks will continue to outperform their U.S. peers. Outside of stocks, he is also overweight cash in his global asset allocation, given greater uncertainty about the near-term path for corporate profits.

☆ 'A financial banana republic': UBS-Credit Suisse deal puts Switzerland's reputation on the line
▼ + stars: | 2023-03-21 | by ( Sam Meredith | ) www.cnbc.com time to read: +4 min

Fabrice Coffrini | Afp | Getty Imageswatch now"The Credit Suisse debacle will have serious ramifications for other Swiss financial institutions. A country-wide reputation with prudent financial management, sound regulatory oversight, and, frankly, for being somewhat dour and boring regarding investments, has been wiped away," Marenzi said. Credit Suisse traded up 3.5% during afternoon deals after ending Monday's session down a whopping 55%. Credit Suisse bond wipeoutUnder the terms of the emergency takeover, investors in Credit Suisse's additional tier-one bonds — widely regarded as a relatively risky investment — will see the value of their holdings slashed to zero. One euro was last seen trading at 0.9961 Swiss francs, weakening from 0.9810 when compared with March 14.

☆ Credit Suisse bondholders prepare lawsuit after contentious $17 billion writedown
▼ + stars: | 2023-03-21 | by ( Elliot Smith | ) www.cnbc.com time to read: +3 min

A sign of Credit Suisse bank is seen at their headquarters in Zurich on March 20, 2023. A number of Credit Suisse bondholders said Tuesday that they were considering legal action after $17 billion of the bank's additional tier-one (AT1) bonds were wiped out as part of its emergency sale to UBS . David Benamou, chief investment officer at Axiom Alternative Investments and a holder of Credit Suisse AT1 bonds, told CNBC on Tuesday that he would be joining the lawsuit along with, he imagined, "probably most bondholders." Was Credit Suisse failing? The Credit Suisse write-down represents the largest loss ever inflicted on AT1 investors since their inception.

The Credit Suisse rescue has shaken the European banking sector and fears of wider fallout remain. Under the Credit Suisse rescue deal, 16 billion Swiss francs worth of Credit Suisse Additional Tier 1 debt will be written down to zero on the orders of the Swiss regulator. Overall, bank debt remained under pressure, with the cost of insuring exposure to the debt rising in the credit default swaps (CDS) market. CONTAGION RISKThe wipeout of AT1 bonds in the Credit Suisse rescue has alerted fixed income investors to the risks of investing in these instruments. At Credit Suisse, the bank's AT1 bonds were bid as low as 1 cent on the dollar on Monday as investors braced for the wipeout.

FRANKFURT, March 20 (Reuters) - European supervisors tried to stop a rout in the market for convertible bank bonds on Monday, saying owners of this type of debt would only suffer losses after shareholders have been wiped out - unlike what happened at Credit Suisse (CSGN.S). Regulators in the European Union and Britain were reacting to a decisions by Swiss authorities to write off Credit Suisse's Additional Tier 1 (AT1) bonds even as stockholders received shares in UBS (UBSG.S). The EU regulators - the European Central Bank, the European Banking Authority and the Single Resolution Board - said they would continue to impose losses on shareholders before bondholders. The comments helped the price of bank bonds cut losses and were echoed by the Bank of England shortly after. Credit Suisse's AT1 bonds contained a clause allowing Swiss authorities to write them off if the bank became unviable, regardless of what happens to the shares.

☆ Morning Bid: Fed halt being priced as bank blaze smoulders
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +5 min

A look at the day ahead in U.S. and global markets from Mike DolanAnother weekend of financial firefighting has doused the whole interest rate horizon as the banking blaze smoulders. European bank chiefs were immediately on guard for further contagion and insisted more support was required. And that thinking has crushed the interest rate horizon everywhere. Futures markets now see the first Fed rate cut emerging by midyear. * European Central Bank President Christine Lagarde speaks at the European Parliament in Brussels* Chinese President Xi Jinping meets Russian President Vladimir Putin in Moscow.

SummarySummary Companies C.banks responded to risk-aversive moves in markets - MatsunoJapan's banking system stable as a whole - MatsunoFinmin says will keep assessing impact of Credit Suisse buyoutMarket rout may complicate BOJ's exit path from easy policyTOKYO, March 20 (Reuters) - Japan's top government spokesperson said on Monday the banking system was stable, seeking to reassure markets the country won't see a contagion from U.S. and European banking sector woes. "Each country promptly ramped up efforts as risk-aversive moves were seen in financial markets," Matsuno told a regular news conference. "Japan's financial system is stable as a whole," he said, adding that authorities were watching financial market moves "with a strong sense of alarm". For now, financial authorities in Tokyo see the most likely risk for Japan coming from a deterioration in the U.S. economy that would hurt exports, rather than a direct bank contagion. "The failure of two U.S. banks spilled over to a Swiss bank in a seemingly unrelated way," one official said.

"Each country promptly ramped up efforts as risk-aversive moves were seen in financial markets," Matsuno told a regular news conference. "Japan's financial system is stable as a whole," he said, adding that authorities were watching financial market moves "with a strong sense of alarm". The remarks came after Finance Minister Shunichi Suzuki told reporters on Monday the government would continue to "carefully assess" how a weekend rescue deal for Credit Suisse Group would affect Japan's financial sector. For now, financial authorities in Tokyo see the most likely risk for Japan coming from a deterioration in the U.S. economy that would hurt exports, rather than a direct bank contagion. "The failure of two U.S. banks spilled over to a Swiss bank in a seemingly unrelated way," one official said.

SummarySummary Companies C.banks responded to risk-aversive moves in markets - MatsunoJapan's banking system stable as a whole - MatsunoGovt watching market moves with strong sense of alarm - MatsunoFinmin says will keep assessing impact of Credit Suisse buyoutTOKYO, March 20 (Reuters) - Japan's banking system is stable and the country will not see a contagion from U.S. and European banking sector woes, Chief Cabinet Secretary Hirokazu Matsuno said on Monday. "Each country promptly ramped up efforts as risk-aversive moves were seen in financial markets," Japan's top government spokesperson told a regular news conference. "Japan's financial system is stable as a whole," he said, adding that authorities were watching financial market moves "with a strong sense of alarm". The remarks came after Finance Minister Shunichi Suzuki told reporters on Monday the government would continue to "carefully assess" how a weekend rescue deal for Credit Suisse Group would affect Japan's financial sector. Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Tom Hogue and Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

☆ Explainer: How resilient are Indian lenders amid a global banking turmoil?
▼ + stars: | 2023-03-20 | by ( Siddhi Nayak | ) www.reuters.com time to read: +5 min

He does not foresee a direct impact of the global banking turmoil on Indian banks. HOW WELL CAPITALISED ARE INDIAN BANKS? Reuters GraphicsHOW ARE INDIAN BANKS' BOND PORTFOLIOS PERFORMING? Indian banks are not facing the same level of pressure on their bond portfolios as U.S banks because Indian interest rates have risen less. If Indian banks mark their held-to-maturity (HTM) investments to market, it would bring down their CET-1 capital by 12-25%, estimates Moody's Investors Service.

☆ Credit Suisse crisis: The market is in 'seek and destroy' mode, analyst says
▼ + stars: | 2023-03-20 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailCredit Suisse crisis: The market is in 'seek and destroy' mode, analyst saysJames Sym, head of equities at River and Mercantile, discusses UBS' deal to buy Credit Suisse and the outlook for the European banking sector.

☆ 'Shotgun wedding': What the UBS rescue of Credit Suisse means for global markets
▼ + stars: | 2023-03-20 | by ( Elliot Smith | ) www.cnbc.com time to read: +6 min

Axel Lehmann, chairman of Credit Suisse Group AG, left, and Colm Kelleher, chairman of UBS Group AG, during a news conference in Bern, Switzerland, on Sunday, March 19, 2023. "The accelerating loss of confidence and the escalation over the last few days have made it clear that Credit Suisse can no longer exist in its current form," Lehmann said. In equal parts "shotgun wedding" and arranged marriage, UBS agreed to buy stricken domestic rival Credit Suisse for 3 billion Swiss francs ($3.25 billion) on Sunday. The government will offer a loss guarantee of up to 9 billion Swiss francs, with UBS assuming the first 5 billion of potential losses. Shares of both UBS and Credit Suisse plunged on Monday morning, however.

☆ European stocks slide as Credit Suisse buyout fails to soothe investors
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +1 min

The pan-European STOXX 600 index (.STOXX) fell 0.8% by 0807 GMT, after having recorded its biggest weekly decline of the year on Friday. Shares of Credit Suisse slumped 62.3% after rival UBS Group AG said it will pay 3 billion Swiss francs ($3.23 billion) for the 167-year-old bank and assume up to $5.4 billion in losses, in a package orchestrated by Swiss regulators on Sunday. Investors were also spooked by news that Credit Suisse additional tier-1 bonds - or AT1 bonds - with a notional value of $17 billion will be valued at zero, angering some of the holders of the debt who thought they would be better protected than shareholders. The wider European banking index (.SX7P) slid 3.2% to hit its lowest level in three months. Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-PhillipsOur Standards: The Thomson Reuters Trust Principles.

☆ UBS could see big gains after forced Credit Suisse merger. Big U.S. banks may also be winners, analysts say
▼ + stars: | 2023-03-20 | by ( Alex Harring | ) www.cnbc.com time to read: +5 min

UBS ' acquisition of Credit Suisse could lead to big gains for the Swiss bank. UBS agreed to buy Credit Suisse for 3 billion Swiss francs, or around $3.2 billion, in a forced deal announced Sunday. As part of the deal, Credit Suisse shareholders receive 1 UBS share for every 22.48 Credit Suisse shares they hold. But Barclays analyst Amit Goel wasn't so sure, cutting his view on European banks to neutral from positive on Monday. Wells Fargo's Mike Mayo, meanwhile, sees opportunity for U.S. banks coming out of the UBS takeover of Credit Suisse.

☆ European supervisors say shares should be wiped out before bonds
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, March 20 (Reuters) - European supervisors tried to stop a rout in the market for convertible bank bonds on Monday, saying owners of this type of debt would only suffer losses after shareholders have been wiped out - unlike what happened at Credit Suisse (CSGN.S). The European Banking Authority, European Central Bank and the Single Resolution Board and were reacting to a decisions by Swiss authorities to write off Credit Suisse's Additional Tier 1 bonds even as stockholders received shares in UBS (UBSG.S). The three European regulators - respectively responsible for writing the rules, applying them and winding down failing banks - said they would continue to impose losses on shareholders before bondholders. "Additional Tier 1 is and will remain an important component of the capital structure of European banks," they added. The supervisors welcomed, however, "the comprehensive set of actions taken yesterday by the Swiss authorities" to save Credit Suisse.

LONDON, March 20 (Reuters) - European bank bonds slumped on Monday following the state-backed rescue of Credit Suisse (CSGN.S) by UBS (UBSG.S) as a wipeout of some bondholders raised concerns around broader bank capital and also hammered bank shares. "The takeover of Credit Suisse by UBS was done fast and should have provided reassurance to the market that we haven’t had another bank collapse. However, what it has done is exposed the issues around AT1 bonds,” said Russ Mould, investment director at AJ Bell. In the bond market, Credit Suisse's Additional Tier 1 (AT1) bonds were bid as low as 1 cent on the dollar on Monday as investors braced for the wipeout. Shares in Credit Suisse (CSGN.S) fell as much as 64.5% while UBS Group (UBSG.S) shares dropped as much as 16%.

☆ What are AT1 bonds and why are Credit Suisse’s now worthless?
▼ + stars: | 2023-03-20 | by ( Anna Cooban | ) edition.cnn.com time to read: +4 min

But it is the owners of Credit Suisse’s $17 billion worth of “additional tier one” (AT1) bonds who have been left fully in the cold. David Benamou, chief investment officer at Axiom Alternative Investments, a French wealth management firm with exposure to AT1 bonds, called the decision “quite surprising, not to say … shocking.”What are AT1 bonds? AT1 bonds are also known as “contingent convertibles,” or “CoCos”. It is not the write-down of Credit Suisse’s AT1 bonds that has rocked investors, but the fact that the bank’s shareholders will receive some compensation when bondholders will not. But because Credit Suisse’s demise has not followed a traditional bankruptcy, analysts told CNN, the same rules don’t apply.

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