Credit Suisse moved to take action to strengthen liquidity. It outlined the steps including that it will borrow up to fifty billion Swiss francs from the Swiss National Bank . The news has eased fear of collapse of the bank, which is deemed a globally systemic important financial institution and is thus “too big to fail” (and plenty of folks add that its troubles run too deep to rescue). EUR/USD and equity markets popped a little higher on the news but there has been not much follow through to note.

While banking system risk is the focus of global markets there were other items on the agenda here during the session.

New Zealand Q4 GDP came in much, much worse than expected. At -0.6% q/q vs. the -0.2% expected (consensus) by analysts and +0.7% in Reserve Bank of New Zealand forecasts. While Q4 2022 is very stale news, its an indication of what the NZ economy is going through now and in the short term ahead. NZD/USD dropped on the data, bounced back and has since subsided again back close to its earlier low. Expectations for the next Reserve Bank of New Zealand rate hike are being revised down.

Remaining with data, Japanese trade data improved, as did machine order data. USD/JPY fell to circa 132.50 but subsequently bounced back a big figure to approach 133.50 again. Its back under 133.00 as I post.

Further data today showed the Australian jobs market bouncing back strongly in February. Jobs growth surprised to the topside while the unemployment rate surprised to the downside. AUD/USD responded by adding just a few points and has since dribbled back down to be little net changed on the session.

The WSJ reported that the G7 opposes lowering the oil price cap on Russian crude oil from US$60 /bbl

Asian equity markets were all weak:

  • Japan’s Nikkei 225 -1.2%

  • China’s Shanghai Composite -0.5%

  • Hong Kong’s Hang Seng -1.6%

  • South Korea’s KOSPI -0.3%

  • Australia’s S&P/ASX 200 -1.5%

USD/JPY:

usdyen wrap 16 March 2023