Government bond yields are tumbling around the world, with investors betting on a shift in central banks' tightening monetary policy in order to defuse contagion risks linked to the failure of Silicon Valley Bank. The most important breaks are recorded on two-year government bonds of the Eurozone, with the yield of the German Bund falling by 44 basis points and that of the OAT French by 46 while for the BTP the decline is 'contained' to 29 points. Traders see the ECB's terminal rate 'collapse' to 3.56%. The effects can also be seen on the euro, which reduces to 0.25% the rise against the dollar, with which it trades at 1.067. Concerns about new SVB cases among US regional banks materialize on Wall Street where First Regional Bank fell more than 60% in pre-trading, despite reassurances about its liquidity position. HSBC, which took over the SVB's UK branch for one pound, fell 3.4%. To give the measure of the degree of fear on the markets is the Vix index, which measures volatility on Wall Street, jumped to the highest since last October.
The effects are also felt on the European stock markets that collapse despite the emergency measures taken in the United States to deal with the failure of the American institution, to prevent the crisis from infecting the banking system. Investors remain concerned about a possible domino effect. Paris fell 2.79%, Frankfurt fell 3.03% and London lost 2.32%. Milano, black jersey, leaves on the ground the 4.34%%.
Today's Eurogroup will also "discuss" the bank crash, Eurogroup President Paschal Donohoe said in an interview with Bloomberg TV. French Finance Minister Bruno le Maire, however, sees no contagion risks for the country's banks from the collapse of SVB as the sector "is solid". Speaking to France Info, the minister explained that "what happened in the United States is unique, with a bank that is exposed exclusively to the technology sector. There is no specific alarm for the banking sector French, we are certainly following the story closely," he added.
Credit Suisse stock reached a new all-time low in early trading on the Swiss stock exchange in the wake of the turmoil in the banking sector. The Swiss bank's shares tumbled more than 8% and were trading at 2.29 Swiss francs ($2.50) per share, down from the previous low of 2.41 francs per share reached on Friday.
German banking supervisor Bafin froze the assets of the German branch of Silicon Valley Bank following the bankruptcy of the Californian institution and noted that the branch has "no systemic importance". The German supervisory body explained: "The critical situation of the German branch of Silicon Valley Bank does not pose a threat to financial stability" because "it is not of systemic importance".