Analysts at S&P think that it is unlikely that some US bank failures will prevent policymakers from sticking to the task of taming inflation, reported Reuters early Tuesday in Asia.
The global rating agency also mentioned that the decision to write off Credit Suisse’s AT1 bonds may contribute to a higher cost of capital for banks.
On the same line were comments from a Senior Swiss lawmaker who warned on Monday that “the UBS-Credit Suisse merger is an enormous risk.”
Market implications
The news backs the market’s hawkish Fed bets and challenges the recently risk-on mood, mainly driven by the hopes of easing the banking crisis. As a result, the risk-barometer AUD/USD pair pauses its three-day uptrend near 0.6720 while S&P 500 Futures also struggle to track Wall Street’s gains at the latest.
Source: www.fxstreet.com
