The U.S. Federal Reserve raises interest rates by 25bps and hints that the hiking cycle may be close to ending. A cautious Jerome Powell says that recent banking sector turmoil could trigger a credit crunch. U.S. Treasury Secretary Janet Yellen back-tracks on deposit backstops causing equities to plunge and banks to sell off. We also preview upcoming central bank moves at the Bank of England as the UK struggles to bring down inflation as well as at the SNB following the Credit Suisse collapse. In crypto news, the U.S. SEC accuses Coinbase of potential security violations. Bitcoin, however is touching on nine-month highs.

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U.S. markets receive a boost as bank stocks rally with Californian lender First Republic and others leading gains following a promise of protective measures from U.S. Treasury Secretary Janet Yellen. Investors now await today’s Fed rate decision as well as more assurances a potential wider banking crisis will be contained with markets pricing in a 25bps hike. S&P urge investors to reassess their risk tolerance to AT1 bonds following Credit Suisse’s $17bn bond wipeout. Meanwhile, UBS is reportedly moving to unwind Michael Klein’s majority share in First Boston. And in tech news, TikTok CEO Shou Zi Chew is to testify on Capitol Hill, insisting it is not a CCP agent.  

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Global banks enjoy a relief rally after UBS’s $30bn takeover of beleaguered Swiss rival Credit Suisse. We are live in Zurich for the latest. However, First Republic Bank sees shares plunge once more as news emerges that JP Morgan CEO Jamie Dimon is reportedly leading efforts to stabilise the Californian lender. Credit Suisse bondholders consider legal action against the Swiss state after the government wiped out all bondholders of AT1 debt. UBS’s sees its credit rating revised to ‘negative’ by Moody’s and S&P. In Paris, the government narrowly wins a vote of no-confidence which allows it to push through unpopular pension reforms. Prime minister Elisabeth Borne says the move will secure France’s economic health. In retail news, Amazon is to cut a further 9,000 jobs on fears of economic uncertainty.

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UBS agrees to buy Credit Suisse for CHF 3.2bn in a historic deal that Swiss authorities say was desperately needed to prevent the collapse of the country’s second largest lender. Additional Tier 1 bondholders will be wiped out and UBS will take on more than $5bn of losses. Some of the largest central banks have announced fresh liquidity measures to stem any further fallout. Asian equities are in the red while futures are mixed both in Europe and the U.S. First Republic Bank has its status cut to ‘junk’ by S&P and warns that a recent $30bn emergency deal may fall short.   

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U.S. banks band together, propping up First Republic with a $30 billion rescue deal. Meanwhile, UBS and Credit Suisse reportedly oppose a government-orchestrated tie-up, as the Swiss lender insists its capital position hasn't changed. Wall Street rallies, with banking stocks posting their best day of the year - putting the S&P500 on track for its best weekly performance since January. Investor attention now turns to the Fed and its response to the banking sector turmoil, after the ECB hikes rates by 50 basis points. And protests erupt across France, as Emmanuel Macron exercises his presidential powers to push through his controversial pension reform plan - potentially opening himself up to an immediate vote of no confidence.

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Credit Suisse takes a 50 billion franc lifeline from the Swiss National Bank as it looks to restore confidence in the lender, after shares plummet 24 percent. The Chairman of the Saudi National Bank tells CNBC there have been no talks about providing additional financial assistance to Credit Suisse, as he tries to firm up confidence in the embattled lender. European banks brace themselves after a bruising session - that saw the sector plunge 7%, the worst day since Russia invaded Ukraine. Oil recovers some ground after hitting its lowest level since December 2021, amid fears the banking crisis could dent global economic growth. Cracks in the global banking system cast doubt over the ECB's resolve, with market bets clouded on the likelihood of a 50 basis point hike today.

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Contagion fears ease, sending global equity markets higher while U.S. core CPI tops estimates, putting more pressure on the Fed in the wake of the SVB collapse. China reports a rebound in consumer spending while real estate investment continues to lag as Beijing's post-covid year gets off to a mixed start. Meta continues its "year of efficiency" announcing another 10,000 layoffs, cancelling thousands of open positions, and stopping low priority projects. And the UK gears up for Chancellor Jeremy Hunt's first budget - expected to unveil key pension and childcare reforms, and push ahead with a controversial rise in corporation tax - which critics say will hit the recovery.

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Japanese banks lead losses in Asian trade - as global financial stocks lose almost half a trillion dollars in market value in the wake of Silicon Valley Bank's collapse. U.S. banks post their worst day in three years as ratings agency Moody's places First Republic Bank and five other lenders on downgrade watch. Turmoil in the banking sector sparks a furious rally in U.S. government bonds with the 2-year Treasury yield seeing its biggest three-day decline since 1987. And U.S. measures to prop up the financial system drive bitcoin and other crypto assets higher, easing fears of the sector's exposure to SVB.

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U.S. regulators have promised to fully shield Silicon Valley Bank deposits in a bid to shore up the banking sector and calm contagion concerns after a second lender, Signature Bank, is shut down. U.S. futures spike on the news and Goldman Sachs predicts that the Federal Reserve will refrain from raising interest rates next week as a result. In the UK, potential bidders for SVB’s British arm are circling while Chancellor Jeremy Hunt says the government will work to minimise damage from the fallout. Saudi Aramco posts record full-year profits for 2022 of $161bn and announces it will be hiking its dividend.  

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Wall Street’s top banks suffer a $50bn market cap wipeout following Silicon Valley Bank’s $2bn loss while shedding assets to cover deposit outflows. The rout has triggered contagion fears among those holding bond portfolios and has dragged U.S. indices firmly lower. The Dow is now on track to post its worst week in almost half a year. Asian equities are also down as a result. President Joe Biden unveils his $6.8tn budget blueprint but faces strong opposition from the GOP. Biden is due to hold talks with European Commission President Ursula Von Der Leyen in D.C. where European concerns about the IRA impact will be top of the agenda. In Beijing, President Xi Jinping is re-confirmed as leader for a historic third term. Former Shanghai party boss Li Qiang is expected to be named Premier later this weekend. And in Japan, the BoJ keeps interest rates and yield control policies in place as Haruhiko Kuroda bids farewell as governor. 

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