Economic Data Could Remain Under The Shadow Of The Bank Crisis
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The Silicon Valley Bank (SVB) and Signature Bank collapsed.
SVB’s flash crash raised questions that other similar local banks in the US could also experience liquidity issues and may not be able to pay their depositors back, unless they also start selling their probably loss-making portfolios.
The bank crisis
The US authorities now step in to avoid contagion.
The bank crisis will likely interfere with Federal Reserve (Fed) rate hike expectations.
Fed
Activity in Fed funds futures now assesses more than 98% chance for a 25bp hike in March, not because the US jobs data was soft enough to overhaul rate hike expectations last Friday, but because the Fed can’t ignore the issues caused by the steep interest rate increases in the banking sector and can’t afford to trigger a financial crisis to bring inflation back to 2%.
CPI
Tomorrow’s US inflation data is still important, but the developments across the banking sector could overshadow the data.
Watch the full episode to find out more!
- 0:00 Intro
- 0:43 US bank crisis widens as SVB, Signature Bank collapse
- 5:49 The bank crisis hammers Fed expectations
- 8:05 Economic data could remain under the shadow of the bank crisis
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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