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Mar 22, 20234 min read

UK CPI higher / BofA FM survey / CS AT1's / Powell : Financial or Price Stability?




  • Powell to go financial stability or inflation ?...25bps pretty much priced in, very tricky presser. "This will be Powell's trickiest press conference yet. Either there is exogenous financial conditions tightening that the Fed leans against, or if the Fed keeps going, they have to be ready for a less stable financial system as a result." >>> does 25bps one way or another really matter ? probably not - all about CREDIT

  • "The press is full of angry fund managers saying that the Swiss Government has mucked around with the order of creditors ... AT1 Bonds: (NOT all AT1 are the same, EU confirmed it early doors... hence risk-on since Monday) >>> it was in the main document, not even in the small print, see below ! “The Write-down may occur even if … ordinary shares of CSG remain outstanding”, the fund managers involved did not read the document, they made a mistake, plain and simple ? >>> CS bond holders preparing a lawsuit though it seems - lawyers dream land..

  • Electric Vehicle Battery Makers Test a Future Without Lithium. A test vehicle unveiled by Chinese carmaker JAC has the battery world buzzing about sodium-ion cells

  • WSJ-Vladimir Putin and Xi Jinping have been cementing a decade-long bond, described by some analysts as a “strategic bromance”

  • UK Annual inflation rates rise again following the easing in Jan 2023: Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 9.2% in the 12 months to Feb 2023, up from 8.8% in Jan 2022 CPI rose by 10.4%, up from 10.1% >>> more than sticky this inflation!

  • It is Boris Johnson day for the Conservative Party, as he defends himself in the Privileges Cttee against the charge of recklessly lying to parliament and also votes against Rishi Sunak’s treasured compromise with the EU to fix Brexit arrangements for Northern Ireland

  • UBS shares erase almost all of the losses made during the recent banking rout - quite clearly was the deal of the century for UBS...

  • Swiss gold exports In February, gold exports to China reached 58 tons, valued at $3.5 billion, up from January's 26.1 tons In February, gold exports to India reached 25.6 tons, an increase from January's 3.2 tons

  • Bundesbank chief says rate-setters must be ‘more stubborn’ in inflation fight

 

Markets :

  • Overall Eq markets been in recovery mode since UBS/CS take over, realization that not all AT1 bonds are the same and expectations that FED will go easy today on the dots / presser

  • #Gold a little softer, #WTI crude a little higher for the same reasons

  • FX land more about higher CROSSJPY's as rates correct higher from Monday morning lows

  • All about Powell and #FOMC now - good luck with it - he won't be able to satisfy everyone.. wouldn't want to be in his shoes

 



From Bank of America's Global Fund Manager Survey.. Question: What do you consider the biggest ‘tail risk’? 31% of global investors see a systemic credit event as the biggest risk for markets, up from only 8% last month and knocking inflation concerns (25%, down from 40%) off the first spot for the first time in nine months


From JP Morgan: A recession seems to be a certainty given the banking crisis and the expectation for additional “unknown unknowns” to emerge. Combined, this feels like another bear market rally rather than the beginning of a new bull market




Furthermore, any Write-down will be irrevocable and, upon the occurrence of a Write-down, Holders will not (i) receive any shares or other participation rights in CSG or be entitled to any other participation in the upside potential of any equity or debt securities issued by CSG or any other member of the Group, or (ii) be entitled to any write-up or any other compensation in the event of a potential recovery of CSG or any other member of the Group or any subsequent change in the CET1 Ratio, Higher Trigger Capital Ratio or financial condition thereof. The Write-down may occur even if existing preference shares, participation certificates and ordinary shares of CSG remain outstanding.

"Although the market for CoCos has yet to develop, we think the extended time horizon for implementation will enable these instruments to emerge over time. We also believe that Credit Suisse will be an attractive issuer of these new securities." Brady Dougan, Sept 2010

Right thing to do, if they want to avoid a run into MM funds etc !!

According to Bankrate, the national average yield for savings accounts is 0.23 percent APY for the week of March 15. Many online banks have savings rates higher than the national average, though. >>>> quite ridiculous really








UBS shareholders happy...as mentioned early Monday, it was the deal of the century.. #UBS




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