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Published: Mar 16, 2023
Updated: Mar 16, 2023

Credit Suisse's Turmoil Sends Shockwaves Through Global Markets

Credit Suisse, one of the world's largest banks, is facing a significant setback as its largest shareholder, Saudi National Bank, announced that it would no longer provide financial support. This news has rattled global markets, leading to a sell-off in several sectors. The following article will explore the implications of this development on the markets and investors.

Credit Suisse's Turmoil:

Credit Suisse is in turmoil after Saudi National Bank announced that it would no longer provide financial support. This announcement has caused a ripple effect throughout global markets, with investors reacting with concern. The future of the bank remains uncertain, and its shareholders are likely to bear the brunt of the fallout.

US Markets React:

The US markets reacted to the news with a sell-off, but they managed to close above session lows. This reaction was expected, given the magnitude of the announcement. However, the long-term impact on the US markets is yet to be seen.

Bond Yield and US Dollar:

The 2-year US bond yield closed the session 35 bps lower to 3.91%, while the US Dollar Index jumped 1.1% amid strong gains against the basket. The expected peak for the Fed policy rate, which exceeded 5.5% less than a week ago, slid to about 4.85%. These reactions highlight the concerns that investors have about the stability of the financial system.

Commodity Sell-Off:

The turmoil at Credit Suisse has also led to a significant sell-off in the commodity markets. Brent oil prices tumbled more than 4% to $75 for the first time since December 2021. There was also a huge sell-off in copper, steel, and aluminium ETF, indicating a lack of confidence among investors in the future of the global economy.

Bailout on cards? Or fears would come true

Credit Suisse's troubles have sent shockwaves through global markets, with investors reacting with concern. The long-term implications of this announcement are yet to be seen, but it is clear that there is a lack of confidence among investors in the stability of the financial system. The future of Credit Suisse remains uncertain, and its shareholders are likely to face significant losses. The market will be closely watching developments in the coming days and weeks to determine the extent of the damage caused by this announcement