Squawk Box Europe Express

Bundesbank President Joachim Nagel shrugs off the IMF’s recession warning for Germany, telling CNBC that his country’s economy has improved significantly, having ridden out last year’s energy crisis. Belgium’s central bank governor Pierre Wunsch praises the European banking sector, telling this channel that he estimates that the ECB’s terminal rate will end between 3.5 per cent and 4 per cent. Fed minutes for March push U.S. equities into the red following fears around the banking sector despite last month’s inflation print coming in at its lowest level for almost two years. The IMF’s First Deputy MD says central banks must remain resolute in the fight against price instability. Chinese exports for March come in positive, breaking a five-month slump. And in luxury news, LVMH posts a 17 per cent surge in Q1 sales following strong demand in the Far East.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The IMF warns the world economy is heading for its weakest pace of growth in more than 30 years as it cuts its medium-term outlook. The fund’s chief economist Pierre-Olivier Gourinchas tells CNBC that recent market turmoil has moved the conversation on from growth/inflation onto financial stability versus inflation. Despite the instability seen in the banking sector, the IMF’s Director of Monetary and Capital Markets, Tobias Adrian, believes that financial regulators were correct to move quickly to mitigate contagion. Swiss lawmakers symbolically reject the UBS-Credit Suisse rescue deal at the beginning of an extraordinary parliamentary session investigating the takeover that is expected to last three days. And HSBC swoops for more than 40 former SVB investment bankers as it looks to target health and tech opportunities in the U.S.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese inflation slumps to an 18-month low with factory gate prices falling for a sixth consecutive month. Asian indices are in the green following dovish comments from the BoJ and BoK with investors banking on looser monetary policy, despite suggestions that the Federal Reserve will continue its rate hiking cycle. In the U.S., markets are flat following Good Friday’s robust jobs data. The CPI print and big bank earnings are due out later in the week. And in tech news, Alibaba announces plans to launch an A.I. rival to ChatGPT across all of its apps.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Weakening employment data and soft services activity in the U.S. provoke recession concerns for investors. The sentiment pushes the Nasdaq up to 1 per cent lower and has spilled over into today’s Asian session. French President Macron is in Beijing holding talks with new Premier Li Qiang in a bid to bring the Chinese onside regarding the conflict in Ukraine. He is due to meet President Xi later this morning. U.S. House Speaker Kevin McCarthy hosts Taiwanese President Tsai Ing-wen in California. Tsai issued a warning about Beijing ramping up regional tensions in the South China Sea region. In Switzerland, the federal government cancels Credit Suisse’s executive bonus programme following the bank’s dramatic rescue by rival UBS.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

JPMorgan CEO Jamie Dimon says the banking crisis is far from over and that after-shocks will be felt for years as the global economy nears recession. We are live in Basel where UBS holds its first AGM since the takeover of Credit Suisse and the return of Sergio Ermotti as CEO. Meanwhile, the board of Credit Suisse faced hostile shareholders at its final AGM with Chairman Axel Lehmann expressing his “grief” at the lender’s fate. In the U.S., February employment openings fall below 10 million which could indicate the Fed’s rate-hiking cycle could finally be cooling the economy. Equities, Treasury yields and the dollar all closed lower on Tuesday. Former U.S. President Donald Trump pleads not guilty to 34 felony counts of falsifying business records over alleged hush-money payments. Trump said he was a victim of electoral interference and a politically partisan judiciary. And, as oil nudges higher following this week’s surprise Opec+ supply cut, Shell CEO Wael Sawan tells our colleagues at CNBC Arabia that signi

The board of Credit Suisse prepares to face shareholders during its first AGM in four years and what will likely be its last as an independent bank. We are live in Zurich for the latest. The Dow soars by more than 300 points to close its first session of the second quarter as investors attempt to shrug off fears that the sudden Opec+ supply cut could once again flare up inflation. In Australia, the RBA maintains the interest rate at 3.6 per cent but hints that it could once again pick up its hiking cycle. Former U.S. President Donald Trump flies into New York ahead of his arraignment relating to alleged hush-money payments to a porn star. French cosmetics giant L’Oréal acquires Australian brand Aesop in a $2.5bn deal to expand into the high-end natural goods sector.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Oil surges 8 per cent following a surprise Opec+ cut to supply by more than a million bpd in a bid to reportedly stabilise the market. The Nasdaq enjoys its best quarter in almost three years, unfazed by rising interest rates and the recent banking crisis. In Switzerland, prosecutors investigate UBS’s government-backed takeover of Credit Suisse. The new mega-bank is reportedly ready to slash up to 30 per cent of its workforce. March factory activity in China comes in neutral, stoking fears over global demand. In autos news, Tesla deliveries jump by 4 per cent to a new record for the first three months this year. However, the EV maker misses estimates as production outpaces demand.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

UBS and Credit Suisse are reportedly facing interest payments of CHF10bn as the cost of last week’s emergency lifeline emerge. We are live on the shores of Lake Como, Italy where Ambrosetti managing partner Valerio De Molli tells CNBC the banking crisis is still far from over. In the U.S., the Biden administration hopes to tighten rules on mid-sized banks while bypassing Congress. Regional bank shares close lower as a result. European equities, however, shrug off banking sector contagion fears and are set to see off the month in the green. Non-manufacturing PMI in China for March grows at its fastest pace in a decade but factory activity remains sluggish. Former U.S. President Donald Trump has been indicted by a NY grand jury after a probe into hush money paid to porn star Stormy Daniels during the 2016 presidential campaign.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The EU claims the At1 bond wipe-out at Credit Suisse was wrong. We hear exclusively from the Single Resolution Board Chairman, Dominque Laboureix, who says the body would respect the hierarchy of those bondholders in any future banking crisis. In the U.S. Congress, lawmakers accuse Fed regulators of being ‘asleep at the wheel;’, following the collapse of SVB and Signature Bank. The S&P 500 closes back over the 4,000-point mark with tech stocks leading the way as banking sector jitters fade. The Boao Forum opens in China with new premier Li Qiang warns against chaos and conflict while IMF Managing Director Kristalina Georgieva highlights the economic costs of trade fragmentation.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

UBS re-appoints its former CEO Sergio Ermotti to take over from Ralph Hamers from the 5th of April. The Federal Reserve’s top regulator, Michael Barr, slams Silicon Valley Bank for its asset management prior to the lender’s collapse. In China e-commerce giant Alibaba spins off its businesses into six units that could potentially opt for separate IPOs. Asian markets are in the green on the news. And U.S. authorities hit FTX founder Sam Bankman-Fried with new charges, this time accusing him of allegedly paying a $40bn bribe to CCP officials.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Federal Reserve’s top banking regulator calls the collapse of SVB “a textbook case of mismanagement”, blaming oversight at the start-up lender as Washington officials set up congressional hearings. Shares at First Citizens Bank soar following the deal with the FDIC to sweep up SVB’s deposits and loans. CEO Frank Holding tells CNBC the move will shore up confidence in the deposit system. Doubleline Capital’s Jeffrey Gundlach urges investors to sell into the rallies after warning a U.S. recession is imminent. And in crypto news, U.S. regulators sue exchange Binance and its CEO CZ for allegedly violating compliance rules to attract American consumers.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

First Citizens Bank has agreed to buy collapsed Silicon Valley from the U.S. FDIC, taking on all its deposits and loans. Regulators are mulling disciplinary action against Credit Suisse as the cost of insuring defaults causes Deutsche Bank to plunge. German Chancellor Olaf Scholz says that comparisons between the two banks should not be made. Chinese industrial profits slump by more than 20 per cent in January and February as rising commodity costs and a bumpy Covid recovery impact manufacturers. In France, Prime Minister Elisabeth Borne is to meet with opposition leaders as violent pension reform protests continue around the country. And in Israel, President Isaac Herzog has called on the government to stop its overhaul of the judiciary after Prime Minister Benyamin Netanyahu sacked the country’s defence minister over his opposition to the plans. The move has triggered mass demonstrations nationwide.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art1

U.S. equities close in the green following a rollercoaster session and are set to end the week higher after U.S. Treasury Secretary Janet Yellen moves to calm contagion fears. The UK, Switzerland and Norway all hike interest rates. BoE Governor Andrew Bailey says that the recent turmoil in the banking sector is not a repeat of 2008. EU leaders meet in in Brussels following the meeting between Chinese President Xi Jinping and Russian President Vladimir Putin and warn that the rapprochement between the two nations poses a ‘big challenge’ for the bloc. TikTok CEO Shou Zi Chew is grilled by U.S. Congress where lawmakers are threatening to ban the controversial Chinese app. Chew insists the company is free from CCP influence. And shares in Jack Dorsey’s payment firm Block slide following accusations by short-seller Hindenberg Research of inflated user numbers and allowing fraudulent paymentsSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-m

The U.S. Federal Reserve raises interest rates by 25bps and hints that the hiking cycle may be close to ending. A cautious Jerome Powell says that recent banking sector turmoil could trigger a credit crunch. U.S. Treasury Secretary Janet Yellen back-tracks on deposit backstops causing equities to plunge and banks to sell off. We also preview upcoming central bank moves at the Bank of England as the UK struggles to bring down inflation as well as at the SNB following the Credit Suisse collapse. In crypto news, the U.S. SEC accuses Coinbase of potential security violations. Bitcoin, however is touching on nine-month highs.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. markets receive a boost as bank stocks rally with Californian lender First Republic and others leading gains following a promise of protective measures from U.S. Treasury Secretary Janet Yellen. Investors now await today’s Fed rate decision as well as more assurances a potential wider banking crisis will be contained with markets pricing in a 25bps hike. S&P urge investors to reassess their risk tolerance to AT1 bonds following Credit Suisse’s $17bn bond wipeout. Meanwhile, UBS is reportedly moving to unwind Michael Klein’s majority share in First Boston. And in tech news, TikTok CEO Shou Zi Chew is to testify on Capitol Hill, insisting it is not a CCP agent.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Global banks enjoy a relief rally after UBS’s $30bn takeover of beleaguered Swiss rival Credit Suisse. We are live in Zurich for the latest. However, First Republic Bank sees shares plunge once more as news emerges that JP Morgan CEO Jamie Dimon is reportedly leading efforts to stabilise the Californian lender. Credit Suisse bondholders consider legal action against the Swiss state after the government wiped out all bondholders of AT1 debt. UBS’s sees its credit rating revised to ‘negative’ by Moody’s and S&P. In Paris, the government narrowly wins a vote of no-confidence which allows it to push through unpopular pension reforms. Prime minister Elisabeth Borne says the move will secure France’s economic health. In retail news, Amazon is to cut a further 9,000 jobs on fears of economic uncertainty.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

UBS agrees to buy Credit Suisse for CHF 3.2bn in a historic deal that Swiss authorities say was desperately needed to prevent the collapse of the country’s second largest lender. Additional Tier 1 bondholders will be wiped out and UBS will take on more than $5bn of losses. Some of the largest central banks have announced fresh liquidity measures to stem any further fallout. Asian equities are in the red while futures are mixed both in Europe and the U.S. First Republic Bank has its status cut to ‘junk’ by S&P and warns that a recent $30bn emergency deal may fall short.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. banks band together, propping up First Republic with a $30 billion rescue deal. Meanwhile, UBS and Credit Suisse reportedly oppose a government-orchestrated tie-up, as the Swiss lender insists its capital position hasn't changed. Wall Street rallies, with banking stocks posting their best day of the year - putting the S&P500 on track for its best weekly performance since January. Investor attention now turns to the Fed and its response to the banking sector turmoil, after the ECB hikes rates by 50 basis points. And protests erupt across France, as Emmanuel Macron exercises his presidential powers to push through his controversial pension reform plan - potentially opening himself up to an immediate vote of no confidence.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Credit Suisse takes a 50 billion franc lifeline from the Swiss National Bank as it looks to restore confidence in the lender, after shares plummet 24 percent. The Chairman of the Saudi National Bank tells CNBC there have been no talks about providing additional financial assistance to Credit Suisse, as he tries to firm up confidence in the embattled lender. European banks brace themselves after a bruising session - that saw the sector plunge 7%, the worst day since Russia invaded Ukraine. Oil recovers some ground after hitting its lowest level since December 2021, amid fears the banking crisis could dent global economic growth. Cracks in the global banking system cast doubt over the ECB's resolve, with market bets clouded on the likelihood of a 50 basis point hike today.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Contagion fears ease, sending global equity markets higher while U.S. core CPI tops estimates, putting more pressure on the Fed in the wake of the SVB collapse. China reports a rebound in consumer spending while real estate investment continues to lag as Beijing's post-covid year gets off to a mixed start. Meta continues its "year of efficiency" announcing another 10,000 layoffs, cancelling thousands of open positions, and stopping low priority projects. And the UK gears up for Chancellor Jeremy Hunt's first budget - expected to unveil key pension and childcare reforms, and push ahead with a controversial rise in corporation tax - which critics say will hit the recovery.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.