A look at the day ahead in European and global markets from Tom Westbrook
But three recent U.S. bank failures highlight the brutal speed with which confidence, and deposits, can evaporate.
The ECB's response to this febrile atmosphere in financial markets - while inflation is still running hot - will be telling on policymakers' approach to the mounting stress. It will be a tricky balance. A big interest rate hike, even if justified by economic conditions, can unleash fear that more banks - or something else - is going to break. A hold-steady or even a cut will feed fears that something very big is very wrong.
Either way, the outcome will test markets' dramatic repricing of the worldwide interest rate outlook in recent days.from near certainty on a 50 bp hike only a day earlier.- Customers and markets' response to Credit Suisse's plansReporting by Tom Westbrook; Editing by Christopher Cushing
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