All articles tagged with #global banking sector
Bitcoin has slipped 0.8% over the past 24 hours, but remains on track for a solid month with almost 20% gains in March and over 66% gains this year. Confidence in the global banking sector has been wavering, contributing to Bitcoin's success.
Deutsche Bank shares fell by as much as 14.9% on Friday to their lowest in five months, after the cost of insuring the bank's debt against the risk of default shot to more than four-year highs. Deutsche Bank's credit default swaps (CDS) - a form of insurance for bondholders - shot up above 220 basis points (bps) - the most since late 2018 - from 142 bps just two days ago. The rise in CDS for major European banks reflects investors' reluctance to carry any risk on their portfolios going into the weekend. Despite the turbulence, market watchers highlight that European regulators and central banks have reiterated their intention to keep markets stable, and that the banks themselves are more strongly capitalised and regulated than they were back in 2007 just before the global financial crisis.
UK inflation unexpectedly rose to 10.4% in February, driven by higher food prices and pricier drinks in pubs and restaurants. The Bank of England is set to announce on Thursday whether it will raise interest rates for the 11th meeting in a row, with investors split on whether it will pause due to recent upheaval in the global banking sector. Overall inflation for food and non-alcoholic drinks rose to 18.0%, its highest since 1977. In contrast, the US CPI fell in February to 6.0% year-over-year, with 62% of investors expecting the Federal Reserve to continue hiking rates.
Canada's inflation rate slowed to 5.2% in February, its lowest level in 13 months, backing up the central bank's plans to hold off on further interest rate hikes. The Bank of Canada left its key overnight interest rate on hold at 4.50% earlier in March, and repeated that it would pause further rate increases if inflation came down in line with its forecasts, reaching its 2% target next year. Money markets largely see the central bank keeping rates unchanged at its next meeting on April 12, but due in part to the banking turmoil, they now expect the central bank's next move to be a cut later this year.