Financial Markets Daily Report

Financial Markets Daily Report
20 març 2023

In the last session of the week, investors’ concerns about liquidity shortage in the banking system continued to dominate the scenario and risk-aversion set the tone in financial markets.

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  • In the last session of the week, investors’ concerns about liquidity shortage in the banking system continued to dominate the scenario and risk-aversion set the tone in financial markets.
  • During the weekend, UBS advanced talks to buy Credit Suisse with help from the Swiss National Bank and the Swiss government. Also, six central banks, including the Fed and the ECB, increased the frequency of USD swap lines in order to boost dollar liquidity in the system.
  • In this context, yields on sovereign bonds plunged, with the US Treasury and the German Bund fluctuating below 3.5% and 2.15%, respectively. Stock indices declined modestly in the US and Europe while advancing in Asia.
  • This week the focus will be on the Federal Reserve meeting (Wednesday), where we expect a 25bp interest rate hike, and on the March flash PMI for the main advanced economies.
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