The Day After
Markets are much calmer after the Credit Suisse-UBS deal. NAB’S Taylor Nugent says we are already seeing markets pricing in a greater chance of a 25bp rate hike from the Fed this week, and less chance of rate cuts later in the year.
NAB Morning Call · NAB - The Morning Call
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Show Notes
Tuesday 21st March 2023
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Markets were relatively calm on the first day after the announcement of the Credit Suisse-UBS deal. One risk of contagion was in the AT1 (addition tier one) bond markets, as Credit Suisse wrote their $17 billion value down to zero, leaving bondholders with nothing. NAB’s Taylor Nugent says there seems to be some acceptance that this is a Swiss-only story, and AT1 bondholders would count before equities in the pecking order in the case of other banking right downs. So, now, as markets seem to be accepting that the banking crisis is contained, does that mean central banks – like the Fed this week – can push higher on rates?
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