European financial centers rose copiously by 1.42% in Paris, 1.75% in Frankfurt and 1.79% in London.
The stock markets confirmed on Tuesday their rebound that began the day before, the crisis of confidence in the financial system seeming to ease thanks to the various measures taken to limit the risks of contagion, investors being able to concentrate on the meeting of the American central bank (Fed ).
European financial markets rose copiously by 1.42% in Paris, 1.75% in Frankfurt and 1.79% in London, without however compensating for the losses of the past week generated by fears concerning the solidity of the banking system. . In Zurich, the SMI gained 1.4%.
Roughly attacked last week, banking stocks continued to raise the bar like UBS (+12.12%), Deutsche Bank (+6.05%), Commerzbank (+7.44%) or even BNP Paribas (+4.15%) and Societe Generale (+4.30%).
After its heavy setbacks, Credit Suisse regained 6.96% and the American bank First Republic, still rolled on Wall Street on Monday, rose by around 42% around 5:00 p.m. GMT.
This rebound in banking securities comes two days following the rescue in extremis of Credit Suisse, bought a pittance by its competitor and compatriot UBS.
The New York Stock Exchange also regained ground, supported by a rebound in banking stocks: the Dow Jones index advanced by 0.50%, the broader S&P 500 index by 0.70% and the Nasdaq by 0.96%.
After the big losses recorded last week, bond yields are also rebounding.
“Market participants have reassessed the current situation in the banking sector and no longer see the potential impact on European banks and financial institutions as too heavy,” according to independent analyst Andreas Lipkow.
Nevertheless, he stresses, “developments in the US financial sector are still being watched and the behavior of the US Federal Reserve tomorrow (Wednesday) should not be underestimated”.
Governments and monetary authorities both in the United States, following the bankruptcy of the American establishments Silicon Valley Bank (SVB) and Signature Bank earlier in the month, and in Europe with Credit Suisse, have provided strong responses to reassure on the solidity financial.
Despite the strong turbulence in the financial sector since the bankruptcy of SVB, depositors’ confidence “is strong” in European banks, which are deemed solid, said Tuesday Andrea Enria, senior official of the European Central Bank (ECB).
According to excerpts from her speech at the American Bankers Organization (ABA) annual conference in Washington, US Treasury Secretary Janet Yellen assured that the Fed’s responses over the past week “are working as intended to provide liquidity to the banking system” and that “money withdrawals from regional banks have stabilized”.
The banking sector in the United States “remains solid, resilient, well capitalized” and “has liquidity”, assured his side the boss of the ABA, Rob Nichols.
The Fed in a delicate position
After the ECB, which last week continued on the course of monetary tightening without committing to the pro
chain rate movement, investors will observe the reaction of the Fed, which is due to make its monetary policy decision on Wednesday following two days of meetings.
Investors drastically lowered their expectations of the peak in key interest rates, the main tool of central banks to fight inflation, in the name of financial sector stability.
“The Fed’s exercise is therefore certainly not the easiest, but might be simplified by the flexibility offered to it, at least on paper, by the position it has favored until now, namely: nothing is predefined”, according to Véronique Riches-Flores, economist of the firm RichesFlores.
All options are open, notes Ms. Riches-Flores, “including the possibility of returning to a much more aggressive policy in the long term, if, the current banking crisis circumscribed, the American economy continues on its current growth trajectory”.
On the side of oil and currencies
The euro rose 0.43% to 1.0768 dollars, around 5:10 p.m. GMT.
Bitcoin was trading at $28,348, up 0.94%.
The barrel of Brent from the North Sea rose by 1.46%, to 74.88 dollars, and that of American WTI by 1.86% to 68.90 dollars, around 5:10 p.m. GMT.
