Following Wednesday’s intense flight to safety that was triggered by renewed fears over Credit Suisse collapsing after failing to receive additional financial support, market mood seems to have started to improve early Thursday. The European Central Bank (ECB) will announce its policy decisions later in the day and the US economic docket will feature February Housing Starts, Building Permits and the Federal Reserve Bank of Philadelphia’s Manufacturing Survey for March.
Bloomberg reported early Thursday that Saudi National Bank’s, Chairman, Ammar Al Khudairy said the panic surrounding Credit Suisse was unwarranted. Al Khudairy added that regulators were ready to “plug holes when they appear” while noting that the bank was unlikely to need more capital. More importantly, the Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) came out with a statement late Wednesday, saying that Credit Suisse met the capital requirements imposed on banks and that they will provide liquidity if necessary. After having lost over 3.5% on Wednesday, Euro Stoxx 50 was up more than 1% in the pre-market trade. Furthermore, Credit Suisse shares are reportedly indicated more-than-20% higher opening on Swiss exchange.
In the meantime, the US Dollar Index, which rose more than 1% on Wednesday, stages a technical correction and trades in negative territory at around 104.50. The benchmark 10-year US Treasury bond yield is up more than 1% on the day following Wednesday’s sharp decline. Finally, US stock index futures are up marginally in the early European session.
EUR/USD lost more than 150 pips on Wednesday and came within a touching distance of 1.0500 before staging a rebound. At the time of press, the pair was trading a few pips above 1.0600, adding 0.3% on the day.
GBP/USD fell toward 1.2000 during the American trading hours on Wednesday but managed to erase a portion of its daily losses before the end of the day. The pair stays relatively quiet early Thursday and trades in a tight range below 1.2200.
Despite the broad-based US Dollar strength, USD/JPY closed in negative territory as the Japanese Yen found demand as a safe haven. Early Thursday, the pair stays on the back foot and fluctuates in negative territory at around 133.00.
In the Asian session, the data from Australia showed that Employment Change was +64.6K in February, better than the market expectation of +48.5K. The Unemployment Rate declined to 3.5% from 3.7% and the Participation Rate improved modestly to 66.6% from 66.5%. Other data revealed that Consumer Inflation Expectation in March ticked down to 5% from 5.1% in February. AUD/USD gained traction after these data and was last seen rising 0.5% on the day at around 0.6650.
XAU/USD capitalized on plunging global bond yields on Wednesday and gained nearly 1%. Gold price edges lower amid recovering yields early Thursday and was last seen trading below $1,920.
Bitcoin snapped a three-day winning streak and lost more than 1% on Wednesday. BTC/USD seems to have regained its traction early Thursday and was last seen rising 1.3% at $24,700. Ethereum fell nearly 3% on Wednesday but managed to shake off the bearish pressure in the European morning, recovering toward $1,700.