U.S. stock futures rose in Asian trade on Monday in relief at a weekend rescue deal for Credit Suisse, though the mood was nervous and financial shares remained under pressure from contagion fears, even with support from global central banks.
In a little over a week, the fallout from the collapse of Silicon Valley Bank - which has roiled confidence in the banking system - has brought a globally systemic lender to its knees.for 3 billion francs and assume up to $5.4 billion in losses, in a shotgun merger engineered by Swiss authorities.
Central banks including the Fed, the European Central Bank and Bank of Japan pledged to deepen support for liquidity, by increasing the frequency of seven-day dollar-swap operations from weekly to daily. "The best we can say was there are certainly a lot of concerns about Credit Suisse contagion risk," said Rodrigo Catril, a senior currency strategist at National Australia Bank in Sydney.
"The news overnight from Switzerland has helped," he said, though added that the central bank moves had calmed as well as created nerves. "It's the irony of good news reflecting how bad things are. It's great we're seeing this concerted effort from central banks, and it's positive, but it does also highlight how troubling the circumstances are and how worried central banks appear to be as well."in Europe are examining scenarios of contagion in the region's banking sector and are looking to the Fed and the ECB for stronger signals of support, two senior executives close to the discussions told Reuters.
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