Morning Bid: support for troubled banks calms markets

A preview of the day ahead in the European and global markets of Anshuman Daga

The week-long roller coaster ride for global markets turned calmer and a little more positive on Friday as investors breathed a sigh of relief at efforts in the United States and Europe to support struggling lenders.

Asian stock markets recovered 1.7% after falling 2.7% to more than three months since Monday.

Markets were relieved by moves by major U.S. banks to inject $30 billion in deposits into First Republic Bank on Thursday and bail out the lender caught in a growing crisis triggered by the failure of two other midsize U.S. lenders in the course last week.

US and European stock market performance over the past five trading days

As promised, the European Central Bank raised interest rates by 50 basis points despite calls from some investors not to tighten policy until the turmoil in the banking sector subsides.

What appears to have changed are expectations for rate hikes, although many policymakers have suggested in recent weeks that large increases are warranted.

On Friday, the final CPI data for the Eurozone is expected amid a tight schedule for economic data releases.

As risk sentiment improved, the dollar eased and risk-sensitive currencies strengthened.

Meanwhile, the Federal Reserve is expected to continue its inflation-fighting campaign with a quarter-point hike in interest rates, which just a few days ago looked dodgy due to turmoil in the banking sector.

Reuters Charts Reuters Charts

While shares of Credit Suisse Group recouped most of the losses suffered on Wednesday after announcing it would leverage a $54 billion loan from the Swiss National Bank, some analysts say the support only helped lender some time to figure out what to do next. .

Citing people familiar with the matter, Bloomberg News reported that UBS Group and Credit Suisse oppose a forced merger.

On the business front, Sanofi said it would cut U.S. list prices of its most prescribed insulin product, Lantus, by 78% from next year, following similar moves by rivals. Americans.

Key developments that could influence markets on Friday:

Economic data in Europe: final CPI for the eurozone in February, labor costs in the fourth quarter

US economic data: University of Michigan survey

Reporting by Anshuman Daga; Editing by Simon Cameron-Moore

Our standards: The Thomson Reuters Trust Principles.

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