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)

More investors anticipate that the Federal Reserve’s rate increase cycle could be over due to broader financial turmoil from the failure of two U.S. regional banks in the past week.

Investors in interest-rate futures markets on Wednesday saw a nearly 50% chance that the Fed won’t increase rates at their March 21-22 meeting, up from 30% on Tuesday, according to data compiled by CME Group. That would leave the federal-funds rate between 4.5% and 4.75%.

Officials have raised rates at each of their last eight policy meetings, spanning 12 months, in what has marked the most rapid series of increases since the early 1980s to combat inflation that last year touched a 40-year high. But the bank collapses and resulting turbulence have added a complicating additional factor for the Fed to weigh as it debates its next move on inflation. (Continue Reading – WSJ)

Investors trying to gauge if wage increases in Japan will prompt a central bank policy move this year are keeping a close eye on a report from the country’s largest union federation Friday.

The Rengo data put a handy percentage figure on average wage gains, offering investors an easier-to-grasp number than the slew of releases to date by other unions and companies. Reports from firms including Hitachi Ltd., Panasonic Corp. and Toshiba Corp. already indicate that pay raises are the largest in years.

Economists expect the spring wage negotiations to result in average wage gains of 2.95%, according to a Bloomberg survey earlier this month. That would be the highest since 1994, compared against labor ministry data. Last year’s Rengo figures showed average hikes of 2.07% and covered 4,944 unions representing around 4% of the working population. (Continue Reading – Bloomberg)

Credit Suisse (CSGN.S) on Thursday said it would borrow up to $54 billion from the Swiss central bank to shore up liquidity and investor confidence after a slump in its shares intensified fears about a global financial crisis.

The Swiss bank's announcement helped stem heavy selling in financial markets in Asian morning trade on Thursday, following torrid sessions in Europe and the United States overnight as investors fretted about potential runs on global bank deposits.

In its statement early Thursday, Credit Suisse said it would exercise an option to borrow from the central bank up to 50 billion Swiss francs ($54 billion). That followed assurances from Swiss authorities on Wednesday that Credit Suisse met "the capital and liquidity requirements imposed on systemically important banks" and that it could access central bank liquidity if needed. (Continue Reading – Reuters)