• APAC stocks were mostly lower, following global peers after Credit Suisse turmoil yesterday.
• Swiss National Bank (SNB) and FINMA to provide liquidity to Credit Suisse if necessary.
• US bank giants reportedly reduced direct exposure to Credit Suisse for months.
• European equity futures are indicative of a higher open with the Euro Stoxx 50 +2.0% after the cash market closed down 3.5% on Wednesday.
• DXY is a touch softer and below the 104.50 mark, JPY and CHF lead the majors, NZD lags.
• Looking ahead, highlights include US Building Permits/Housing Starts, Export/Import Prices, IJC, ECB Policy Announcement & Press Conference, Supply from Spain & France.

US TRADE

EQUITIES

• US stocks were mostly lower amid further stress in the banking sector as the outlook for Credit Suisse deteriorated and with the global risk-off mood sparked during European trade after its largest shareholder Saudi National Bank said it would not be providing any more assistance to the bank which slammed shares to record lows and weighed on the sector. However, stocks eventually bounced off their lows in late US trade after the SNB and FINMA announced they would provide liquidity to the bank if needed. Nonetheless, the fears saw another jaw-dropping rip higher in government bonds amid haven flows, while the tech sector was just about kept afloat on the lower yield environment.
• SPX -0.70% at 3,892, NDX +0.42% at 12,251, DJIA -0.87% at 31,875, RUT -1.74% at 1,746.
• Click here for a detailed summary.

CREDIT SUISSE

• Credit Suisse (CSGN SW) announced decisive action to pre-emptively strengthen liquidity which included public tender offers for debt securities and it intends to borrow up to CHF 50bln from the SNB under the covered loan facility and short-term liquidity facility. Furthermore, Credit Suisse International is to repurchase certain OpCo senior debt securities for cash of up to about CHF 3bln, while the bank noted that the additional liquidity would support its core businesses and clients.
• FINMA and the SNB asserted that the problems of certain banks in the USA do not pose a direct risk of contagion for Swiss financial markets, while they added that Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks and if necessary, the SNB will provide Credit Suisse with liquidity.
• US bank giants reportedly cut direct exposure to Credit Suisse for months, according to Bloomberg.
• BNP Paribas (BNP FP) is reportedly reducing exposure to Credit Suisse, according to Bloomberg citing sources.

NOTABLE HEADLINES

• Fed is to launch FedNow instant payments system in July and provided details on the preparation.
• US OCC is engaging in heightened monitoring of national banks and is coordinating with other regulators.
• US government will likely only sell SVB to another bank, ruling out PE and VC firms that had been looking at a potential bid, according to The Information citing sources.
• SVB Financial (SIVB) is reportedly exploring a bankruptcy filing as one option for asset sales, according to Reuters sources. It was also reported that senior banking executives at JPMorgan, Citigroup, Bank of America and Wells Fargo (JPM, C, BAC, WFC) said the chances are still low that any of them will buy SVB Financial (SIVB), according to FBN citing sources.
• FBN's Gasparino noted that bankers and analysts say its possible First Republic (FRC) buyer could be JPMorgan (JPM) because it is closely aligned and provides the warehousing for First Republics loans.

APAC TRADE

EQUITIES

• APAC stocks were mostly lower as the region followed suit to the losses in global peers after the recent Credit Suisse turmoil added to the ongoing banking sector fears. However, the major indices were off worse levels and US equity futures nursed some of the prior day’s losses after Swiss authorities attempted to soothe market concerns and Credit Suisse later announced it will take decisive action to strengthen its liquidity including borrowing up to CHF 50bln from the central bank.
• ASX 200 was dragged lower by weakness in financials and underperformance of the commodity-related sectors with energy stocks hit after oil prices slumped to their lowest in more than a year, although the index finished off its lows after the stronger-than-expected employment data.
• Nikkei 225 retreated below the 27,000 level for the first time since January amid the banking sector jitters and geopolitical concerns after North Korea fired a suspected ICBM ahead of a leadership summit between Japan and South Korea. However, Japanese stocks clawed back some of their losses as participants also digested mixed data releases in which Machinery Orders topped forecast with a surprise expansion Y/Y, while Exports growth missed but still accelerated from the prior month.
• Hang Seng and Shanghai Comp. conformed to the downbeat mood amid frictions with the US which threatened to ban TikTok if its Chinese founder doesn't sell an ownership stake, although the downside was stemmed in the mainland after the central bank’s continued liquidity efforts.
• US equity futures (ES +0.4%) were mildly supported following Credit Suisse's announcement to shore up its liquidity, while the attention stateside turns to data again including the latest jobless claims.
• European equity futures are indicative of a higher open with the Euro Stoxx 50 +2.0% after the cash market closed down 3.5% on Wednesday.

FX

• DXY eventually softened and retraced some of the prior day’s advances with the index lingering just below the 104.50 mark.
• EUR/USD nursed some of its recent losses and reclaimed the 1.0600 handle with some reprieve from the SNB’s attempt to quell Credit Suisse jitters, while the attention now turns to the ECB policy meeting.
• GBP/USD marginally rebounded in quiet trade after a lack of fireworks from the Budget as many of the details were flagged beforehand, while the BoE held emergency talks amid the Credit Suisse crisis.
• USD/JPY was subdued with recent strength in the JPY helped by haven flows and yield differentials.
• Antipodeans were choppy with AUD/USD eventually gaining after a rebound in employment, while NZD/USD was contained by disappointing GDP data which showed the economy contracted by 0.6% Q/Q.
• PBoC set USD/CNY mid-point at 6.9149 vs exp. 6.9173 (prev. 6.8680)

FIXED INCOME

• 10yr UST futures marginally pulled back from the recent bull-steepening that was triggered as the Credit Suisse turmoil stoked global banking sector jitters, while the mild retracements were seen after prices hit resistance near 116.00 and following Credit Suisse’s announcement to strengthen its liquidity.
• Bund futures eased off Wednesday's peak as the attention turns to the ECB policy decision.
• 10yr JGB futures gradually pared some of their gains, while the latest 20yr auction results were mixed with a lower bid-to-cover offset by firmer accepted prices.

COMMODITIES

• Crude futures were in recovery mode after tumbling alongside risk assets this week and following a breakdown of multi-month ranges to their lowest levels since late 2021.
• G7 opposes lowering the Russian oil price cap from USD 60/bbl, according to WSJ
• Spot gold partially faded the recent haven advances but remained above USD 1900/oz.
• Copper futures found some slight reprieve overnight although have far to go to reclaim the prior day's heavy losses which coincided with the Credit Suisse turmoil and banking sector woes.

CRYPTO

• Bitcoin was choppy with prices subdued after they hit resistance at the USD 24,500 level.
• Circle said it cleared all the backlog of minting and redemption requests for USDC as of March 15th, while it had redeemed USD 3.8bln of USDC and minted USD 0.8bln of USDC since Monday.

NOTABLE ASIA-PAC HEADLINES

• China's securities regulator reportedly paused the approvals for new GDR sales amid concerns that China's A-share market could be pressured, according to Bloomberg.
• US threatened to ban TikTok if its Chinese founder doesn't sell ownership stake, while TikTok said the forced sale won't resolve national security issues, according to WSJ.

DATA RECAP

• Chinese China House Prices YY* (Feb) -1.2% (Prev. -1.5%)
• Japanese Trade Balance (JPY)(Feb) -898B vs. Exp. -1069B (Prev. -3497B, Rev. -3499B)
• Japanese Imports YY (Feb) 8.3% vs. Exp. 12.2% (Prev. 17.8%, Rev. 17.5%)
• Japanese Exports YY (Feb) 6.5% vs. Exp. 7.1% (Prev. 3.5%)
• Japanese Machinery Orders MM (Jan) 9.5% vs. Exp. 1.8% (Prev. 1.6%, Rev. 0.3%)
• Japanese Machinery Orders YY (Jan) 4.5% vs. Exp. -3.5% (Prev. -6.6%)
• Australian Employment (Feb) 64.6k vs. Exp. 48.5k (Prev. -11.5k)
• Australian Unemployment Rate (Feb) 3.5% vs. Exp. 3.6% (Prev. 3.7%)
• Australian Full-Time Employment (Feb) 74.9k (Prev. -43.3k)
• New Zealand GDP Prod Based QQ (Q4) -0.6% vs. Exp. -0.2% (Prev. 2.0%, Rev. 1.7%)
• New Zealand GDP Prod Based YY (Q4) 2.2% vs. Exp. 3.3% (Prev. 6.4%)

GEOPOLITICS

• France is accused of delaying the EU's EUR 2bln plan to replenish Ukraine's artillery shell stocks, according to The Telegraph. In relevant news, Israel approved export licences for the sale of anti-drone systems to Ukraine which could be used to counter Iranian drones used by Russia, according to Nexta.
• Russian Defence Minister said US drone flights near Crimea are provocative and could provoke escalation. It was also reported that the US and Russian defence ministers held a phone call which was initiated by the US, according to Interfax.
• North Korea fired a missile which was likely an ICBM type and South Korea's military said North Korea's series of missile launches are against UN resolutions. Furthermore, South Korean President Yoon ordered the military to thoroughly carry out joint drills with the US and maintain readiness against North Korean threats, while he said North Korea will pay the price for reckless provocations and called for strengthening security cooperation with the US and Japan, according to Reuters.
• Taiwan's Foreign Ministry said it told Honduras many times that Taiwan is willing to help in its development and it repeatedly reminded Honduras to pay attention to China's false promises. It was also reported that the US State Department said they will continue to monitor the next steps closely regarding Honduras seeking official ties with China and that the Honduran government should be aware that China makes many promises that are unfulfilled

EU/UK

• BoE held emergency talks with international counterparts on Wednesday night as the crisis deepened at Credit Suisse, according to The Telegraph.
• UK DMO Chief said global financial markets are pretty stressed and volatile, while it was noted that the UK's 2023/24 financing needs are a very large amount of money and that the auction plan is designed to avoid too much stress on primary dealers. DMO chief added that the focus on short-dated gilt issuance reflects the need to limit investors' duration risk and to raise cash at auctions.