Swiss Franc collapses on Credit Suisse fall

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The market sentiment remains sour, as portrayed by Wall Street, extending its losses. Credit Suisse’s sell-off continued in the European session, while the bank’s Credit Default Swaps (CDS) “ spiked to levels that signal Credit Suisse is in deep financial distress,” according to Bloomberg. Therefore, the CBOE Volatility Index (VIX) increased and reached a high of 30.81 before easing to current levels of 27.16.

The US economic docket featured Retail Sales for February. Figures came at -0.4% MoM, exceeding estimates for a 0.3% contraction. Although the data was negative, data showed American consumers’ resilience to spend. On another tranche of data, the Department of Labor (DoL) revealed the Producer Price Index (PPI) for February, in headline and core figures, were below estimates. That shows that the cumulative tightening of the Federal Funds rate (FFR) is working, despite the tightness of the labor market.

Therefore, safe-haven flows bolstered the US Dollar (USD), with the US Dollar index advancing 1.13%, at 104.836. However, US Treasury bond yields have been punished by investors, with US 2s and 10s extending their losses, each down by 37 basis points (bps) and 24 bps, respectively, at 3.889% and 3.453%.

Aside from this, the latest news crossing wires said that the Swiss Regulator FINMA would likely make a statement on Credit Suisse soon.


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