Is Credit Suisse the reason for the turn in the market?

The Saudi National Bank, which is Credit Suisse's top shareholder, has ruled out more financial assistance for the bank and shares have fallen by 10% to a fresh record low. In turn, 5-year CDS in Credit Suisse have shot up further and that is perhaps starting to spook markets and sentiment in European trading.

2-year German bond yields took a quick plunge to a low of 2.62%, down nearly 40 bps from the highs less than an hour ago. We have seen a slight bounce back to 2.75% now but it is evident that markets are extremely jittery about any headline involving banks at the moment. In particular, such a big name as Credit Suisse.

To put things into context, the CDS swaps Swaps Swaps are defined as a derivative contract composed of two parties that exchange the value of cash flow between two separate financial instruments.These are commonly divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Additionally, commodity price, equity price, interest rate, and forex rates are also variables used as one of the cash flows in swaps upon initiation. Understandin Swaps are defined as a derivative contract composed of two parties that exchange the value of cash flow between two separate financial instruments.These are commonly divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Additionally, commodity price, equity price, interest rate, and forex rates are also variables used as one of the cash flows in swaps upon initiation. Understandin Read this Term pricing in Credit Suisse are now 18 times that of UBS and 9 times that of Deutsche Bank. 🤯