Futures on U.S. equities were slightly lower from economic data, which included initial claims for unemployment benefits. Investors were looking forward to the monetary policy decision that would be made by the European Central Bank.
After the lender obtained a loan of $54 billion from the Swiss central bank and its top shareholder stated that the bank would not require any additional capital, Credit Suisse (CS) remained a hot topic of discussion among financial experts. After suffering losses on Wednesday, markets in Europe have since stabilized.
Futures on the Nasdaq 100 (NDX:IND) were slightly higher, moving up by 0.06%. Futures contracts for the S&P 500 index (SPX) were trading 0.17% lower, while those for the Dow (INDU) were off by 0.31%.
The previous trading session had ended with the markets showing a lackluster performance due to concerns regarding the state of the international financial system in the wake of the Credit Suisse (CS) scandal. Authorities in Switzerland moved quickly to throw a lifeline in the amount of $54 billion to the country’s second-largest financial institution.
Earlier, ECB President Christine Lagarde had hinted at a rate hike of 50 basis points, which was essentially what everyone was anticipating she would do. Nevertheless, the recent volatility in banking stocks has increased the likelihood of a 25-basis point increase in interest rates. “Our base case is for a 50-bp hike, but there is a chance it only delivers 25-bp or decides to sit on its hands and wait to see how the situation unfolds,” economists from ING said. “Our base case” refers to the assumption that the central bank will raise interest rates by 50 basis points.
“The financial storms that have been raging on the other side of the Atlantic have revealed some fault lines that were already visible several months ago in the more problematic financial business models. The aftermath of speculative bubbles bursting does not threaten European banks, nor does a liquidity crisis resulting from stretched asset-liability ratios threaten these banks. In a perverse turn of events, observation of the labor markets in the Eurozone would imply that the European Central Bank (ECB) has much more work to do in containing wage growth and core CPI “According to a research note that was released by Jefferies on Wednesday, Sean Darby of the firm said.
The number of people in the United States who submitted applications for weekly unemployment benefits decreased to 192 thousand, which is significantly lower than the consensus figure of 205 thousand. In the meantime, the number of housing starts and building permits reached an all-time high in February.
The Philadelphia Federal Reserve’s indicator of the business outlook for March came in at -23.2, which was significantly lower than the consensus estimate of -15.6.
The prices of exported goods experienced an unexpected increase in February, while the prices of imported goods fell by a smaller amount than anticipated.
Yields on government bonds experienced a sharp decline during the prior trading session and continued their downward trend today. The yield on the 10-year United States Treasury note (US10Y) was lower by 4 basis points, coming in at 3.45%, while the yield on the 2-year Treasury note (US2Y) was lower by 5 basis points, coming in at 3.93%.
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