Squawk Box Europe Express

Bundesbank President Joachim Nagel shrugs off the IMF’s recession warning for Germany, telling CNBC that his country’s economy has improved significantly, having ridden out last year’s energy crisis. Belgium’s central bank governor Pierre Wunsch praises the European banking sector, telling this channel that he estimates that the ECB’s terminal rate will end between 3.5 per cent and 4 per cent. Fed minutes for March push U.S. equities into the red following fears around the banking sector despite last month’s inflation print coming in at its lowest level for almost two years. The IMF’s First Deputy MD says central banks must remain resolute in the fight against price instability. Chinese exports for March come in positive, breaking a five-month slump. And in luxury news, LVMH posts a 17 per cent surge in Q1 sales following strong demand in the Far East.  

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The IMF warns the world economy is heading for its weakest pace of growth in more than 30 years as it cuts its medium-term outlook. The fund’s chief economist Pierre-Olivier Gourinchas tells CNBC that recent market turmoil has moved the conversation on from growth/inflation onto financial stability versus inflation. Despite the instability seen in the banking sector, the IMF’s Director of Monetary and Capital Markets, Tobias Adrian, believes that financial regulators were correct to move quickly to mitigate contagion. Swiss lawmakers symbolically reject the UBS-Credit Suisse rescue deal at the beginning of an extraordinary parliamentary session investigating the takeover that is expected to last three days. And HSBC swoops for more than 40 former SVB investment bankers as it looks to target health and tech opportunities in the U.S.   

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Chinese inflation slumps to an 18-month low with factory gate prices falling for a sixth consecutive month. Asian indices are in the green following dovish comments from the BoJ and BoK with investors banking on looser monetary policy, despite suggestions that the Federal Reserve will continue its rate hiking cycle. In the U.S., markets are flat following Good Friday’s robust jobs data. The CPI print and big bank earnings are due out later in the week. And in tech news, Alibaba announces plans to launch an A.I. rival to ChatGPT across all of its apps.  

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Weakening employment data and soft services activity in the U.S. provoke recession concerns for investors. The sentiment pushes the Nasdaq up to 1 per cent lower and has spilled over into today’s Asian session. French President Macron is in Beijing holding talks with new Premier Li Qiang in a bid to bring the Chinese onside regarding the conflict in Ukraine. He is due to meet President Xi later this morning. U.S. House Speaker Kevin McCarthy hosts Taiwanese President Tsai Ing-wen in California. Tsai issued a warning about Beijing ramping up regional tensions in the South China Sea region. In Switzerland, the federal government cancels Credit Suisse’s executive bonus programme following the bank’s dramatic rescue by rival UBS.

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JPMorgan CEO Jamie Dimon says the banking crisis is far from over and that after-shocks will be felt for years as the global economy nears recession. We are live in Basel where UBS holds its first AGM since the takeover of Credit Suisse and the return of Sergio Ermotti as CEO. Meanwhile, the board of Credit Suisse faced hostile shareholders at its final AGM with Chairman Axel Lehmann expressing his “grief” at the lender’s fate. In the U.S., February employment openings fall below 10 million which could indicate the Fed’s rate-hiking cycle could finally be cooling the economy. Equities, Treasury yields and the dollar all closed lower on Tuesday. Former U.S. President Donald Trump pleads not guilty to 34 felony counts of falsifying business records over alleged hush-money payments. Trump said he was a victim of electoral interference and a politically partisan judiciary. And, as oil nudges higher following this week’s surprise Opec+ supply cut, Shell CEO Wael Sawan tells our colleagues at CNBC Arabia that significantly higher annual investment into oil and gas are required to meet global demand. 

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The board of Credit Suisse prepares to face shareholders during its first AGM in four years and what will likely be its last as an independent bank. We are live in Zurich for the latest. The Dow soars by more than 300 points to close its first session of the second quarter as investors attempt to shrug off fears that the sudden Opec+ supply cut could once again flare up inflation. In Australia, the RBA maintains the interest rate at 3.6 per cent but hints that it could once again pick up its hiking cycle. Former U.S. President Donald Trump flies into New York ahead of his arraignment relating to alleged hush-money payments to a porn star. French cosmetics giant L’Oréal acquires Australian brand Aesop in a $2.5bn deal to expand into the high-end natural goods sector.

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Oil surges 8 per cent following a surprise Opec+ cut to supply by more than a million bpd in a bid to reportedly stabilise the market. The Nasdaq enjoys its best quarter in almost three years, unfazed by rising interest rates and the recent banking crisis. In Switzerland, prosecutors investigate UBS’s government-backed takeover of Credit Suisse. The new mega-bank is reportedly ready to slash up to 30 per cent of its workforce. March factory activity in China comes in neutral, stoking fears over global demand. In autos news, Tesla deliveries jump by 4 per cent to a new record for the first three months this year. However, the EV maker misses estimates as production outpaces demand.  

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UBS and Credit Suisse are reportedly facing interest payments of CHF10bn as the cost of last week’s emergency lifeline emerge. We are live on the shores of Lake Como, Italy where Ambrosetti managing partner Valerio De Molli tells CNBC the banking crisis is still far from over. In the U.S., the Biden administration hopes to tighten rules on mid-sized banks while bypassing Congress. Regional bank shares close lower as a result. European equities, however, shrug off banking sector contagion fears and are set to see off the month in the green. Non-manufacturing PMI in China for March grows at its fastest pace in a decade but factory activity remains sluggish. Former U.S. President Donald Trump has been indicted by a NY grand jury after a probe into hush money paid to porn star Stormy Daniels during the 2016 presidential campaign.

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The EU claims the At1 bond wipe-out at Credit Suisse was wrong. We hear exclusively from the Single Resolution Board Chairman, Dominque Laboureix, who says the body would respect the hierarchy of those bondholders in any future banking crisis. In the U.S. Congress, lawmakers accuse Fed regulators of being ‘asleep at the wheel;’, following the collapse of SVB and Signature Bank. The S&P 500 closes back over the 4,000-point mark with tech stocks leading the way as banking sector jitters fade. The Boao Forum opens in China with new premier Li Qiang warns against chaos and conflict while IMF Managing Director Kristalina Georgieva highlights the economic costs of trade fragmentation.   

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UBS re-appoints its former CEO Sergio Ermotti to take over from Ralph Hamers from the 5th of April. The Federal Reserve’s top regulator, Michael Barr, slams Silicon Valley Bank for its asset management prior to the lender’s collapse. In China e-commerce giant Alibaba spins off its businesses into six units that could potentially opt for separate IPOs. Asian markets are in the green on the news. And U.S. authorities hit FTX founder Sam Bankman-Fried with new charges, this time accusing him of allegedly paying a $40bn bribe to CCP officials.  

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