Uncertainty to Remain High
2023.03.20 06:49
Parsing the latest data reported by European banks, liquidity and funding stability remains reassuring, with LCR and NSFR ratios well above regulatory floors. Credit Suisse has been an outlier in the European banking landscape for years.
Still, concerns that aggressive monetary policy had a significant impact on the economy, banking business and human behavior, in general, cannot be overlooked and is not seen in balance sheets yet. From that perspective, uncertainty could remain high for quite some time, even if recent bank support measures succeed.
Given the current level of rates and more significant downside risk to growth, gold and JPY should remain in vogue even more so if the Fed pauses
Oil bounced in dead cat fashion at the futures open. Still, if we get anywhere near $75bbl today after the markets appear to have entered a phase where growth expectations could more easily dominate policy shocks, I think that would be an even bigger shock!!
