Thursday normally would have been just the latest in a line of what have become ho-hum half-point rate hikes at European Central Bank HQ. At least until something happened half a world away.

The failure of California-based Silicon Valley Bank (SVB) has hit markets like those occasional and often brutal West Coast earthquakes, further squeezing the ECB’s already besieged governing council with what must now feel like pressure of tectonic proportions.

Bonds soared as investors piled into safe havens after US regulators seized control of SVB. The yield of the benchmark German 10-year Bund plunged to below 2.2% Monday from more than 2.6% last week. It pushed to above 2.4% in European trading Tuesday, signalling renewed interest in risker assets as investors bought back big into the banking sector. Citigroup was up nearly 6% and Wells Fargo traded 4% higher at the time of this writing.

(Continue Reading – LiveSquawk)

A near-term pick up in the nation’s economic fortunes, means this week’s UK budget is expected to produce far fewer swingeing cuts to spending than some investors feared just a couple of months ago. This leaves the Chancellor of the Exchequer (finance minister) with a little more fiscal wriggle room although analysts predict he will likely resist splashing the cash.

Households are currently suffering from high inflation and a weakening growth outlook and the majority do not expect the Budget to deliver much in the way of relief. A Savanta poll found that only a third (32%) say they think that it is likely that the Budget will improve the economy.

Chris Hopkins, political research director at Savanta said, “This Budget does not have the makings of a 'classic' in terms of headlines and intrigue, but it's another opportunity for [Prime Minister] Rishi Sunak and his economics lieutenant, Jeremy Hunt, to further push their sensible, pragmatic and considered approach to managing the country and its finances."

(Continue Reading – LiveSquawk)

A report on February retail sales will show whether Americans pulled back on spending after a strong start to the year, aided by unseasonably warm weather and a strong labour market.

U.S. consumers have shown surprising vigour in early 2023, after their spending weakened late last year. Retail sales, a measure of spending at stores, online and in restaurants, rose by a seasonally adjusted 3% in January, the Commerce Department said. That was the largest monthly gain in nearly two years and came after sales fell in November and December.

The department is scheduled to release February figures for spending at 8:30 a.m. ET on Wednesday. Consumers are benefiting from a strong labour market. Employers added a robust 311,000 jobs last month, the Labour Department reported Friday.

(Continue Reading – WSJ)

Credit Suisse Group AG’s top shareholder ruled out providing more financial assistance to the struggling Swiss bank, citing regulatory issues. 

“The answer is absolutely not, for many reasons outside the simplest reason which is regulatory and statutory,” Saudi National Bank Chairman Ammar Al Khudairy said in an interview with Bloomberg TV on Wednesday when asked if the lender was open to assisting Credit Suisse if there was another call for additional liquidity.

Shares in Credit Suisse were trading down 6% in early trading in Zurich. Saudi National Bank, which is 37% owned by the kingdom’s sovereign wealth fund, became Credit Suisse’s biggest shareholder late last year after acquiring a 9.9% stake in the Swiss lender. 

(Continue Reading – Bloomberg)