After yesterday’s session saw German two, five and thirty-year yields suffer their biggest falls in history, and the ten-year took its biggest cut since 1990; after the Eurozone’s interest rate peak was recalculated at 3.10%; and after the Euro’s biggest intraday fall since the 2020 pandemic; well, finally, the ECB remained unperturbed and raised interest rates by 50 bps, bringing the deposit facility to 3%.
In the meantime, however, the SNB came to Credit Suisse’s rescue, providing it with a loan of up to CHF 50 billion because both the central bank and the Swiss regulator believed that the financial institution complied with the capital and liquidity requirements imposed on systemically important banks.
In other words: Credit Suisse would be “too big to fail”. The SNB saved the day, causing the battered stock markets to partially recover from the huge losses (Credit Suisse shares rebounded by 40%) and triggering a sharp rebound in bond yields in a clear improvement in risk sentiment, although volatility indicators remained elevated. The euro recovered from a two-month low.