Squawk Box Europe Express

Japanese banks lead losses in Asian trade - as global financial stocks lose almost half a trillion dollars in market value in the wake of Silicon Valley Bank's collapse. U.S. banks post their worst day in three years as ratings agency Moody's places First Republic Bank and five other lenders on downgrade watch. Turmoil in the banking sector sparks a furious rally in U.S. government bonds with the 2-year Treasury yield seeing its biggest three-day decline since 1987. And U.S. measures to prop up the financial system drive bitcoin and other crypto assets higher, easing fears of the sector's exposure to SVB.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. regulators have promised to fully shield Silicon Valley Bank deposits in a bid to shore up the banking sector and calm contagion concerns after a second lender, Signature Bank, is shut down. U.S. futures spike on the news and Goldman Sachs predicts that the Federal Reserve will refrain from raising interest rates next week as a result. In the UK, potential bidders for SVB’s British arm are circling while Chancellor Jeremy Hunt says the government will work to minimise damage from the fallout. Saudi Aramco posts record full-year profits for 2022 of $161bn and announces it will be hiking its dividend.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wall Street’s top banks suffer a $50bn market cap wipeout following Silicon Valley Bank’s $2bn loss while shedding assets to cover deposit outflows. The rout has triggered contagion fears among those holding bond portfolios and has dragged U.S. indices firmly lower. The Dow is now on track to post its worst week in almost half a year. Asian equities are also down as a result. President Joe Biden unveils his $6.8tn budget blueprint but faces strong opposition from the GOP. Biden is due to hold talks with European Commission President Ursula Von Der Leyen in D.C. where European concerns about the IRA impact will be top of the agenda. In Beijing, President Xi Jinping is re-confirmed as leader for a historic third term. Former Shanghai party boss Li Qiang is expected to be named Premier later this weekend. And in Japan, the BoJ keeps interest rates and yield control policies in place as Haruhiko Kuroda bids farewell as governor. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at

U.S. Federal Reserve Chairman Jerome Powell reiterates his message that the central bank will speed up the pace of rate hikes should it deem it necessary. The jobs market data remains stubborn but Powell insists that March’s rate decision is not yet a foregone conclusion. In China, inflation has slowed to its slowest pace since last February on weaker consumer activity while factory deflation continues to a fifth consecutive month. Kazuo Ueda is approved as the new BoJ governor by the country’s parliament as the central bank attempts to end decades of ultra-loose monetary policy. In crypto news, lender Silvergate has announced it is closing down and returning deposits. And JP Morgan is to sue its former executive and ex-Barclays CEO Jes Staley for failing to disclose his ties with deceased convicted sex offender Jeffrey Epstein. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. Federal Reserve Chairman Jerome Powell warns of a return to a 50bps interest rate hike this month as the jobs market and inflation show little signs of cooling. U.S. indices plunge on Powell’s Senate warning with the Dow lower year-to-date while the 2- and 10-year yield inversion reaches its steepest rate in four decades. The White House has endorsed a bill proposed by a bipartisan group of senators which would allow the Biden administration to block foreign technology applications such as China’s Tik Tok which it could pose a potential national security threat. And on International Women’s Day, IMF Managing Director Kristalina Georgieva tells CNBC that female input is vital to solving today’s global economic problems. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

President Xi Jinping accuses the U.S. of hampering China’s development while Foreign Minister Qin Gang says the two nations could be on course for confrontation. January and February import and export data out of Beijing comes in weak as China’s exit from zero-Covid restrictions is hobbled by supply chain bottlenecks and slowdown concerns. BofA CEO Brian Moynihan and JP Morgan boss Jamie Dimon are both cautious about the U.S. economic forecast ahead of this week’s Congress testimonies by Federal Reserve Chair Jerome Powell. And Down Under, the RBA increases rates by 25bps but softens its forward guidance.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

China forecasts a more modest 5 per cent growth as it opens its annual National People’s Congress. Premier Li Keqiang praised the economy’s resilience amid a challenging global environment. Chinese stocks, however, are down but the rest of Asia is in the green following last week’s positive close on Wall Street. Harris Associates offloads its remaining Credit Suisse stake citing a lack of confidence in the lender’s new strategy, accusing it of burning through capital. And in tech news, UK chip maker ARM hopes to raise $8bn to reach a valuation of $50bn after opting to list in New York rather than London.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese services activity in February surges to its fastest pace in six months ahead of the National People’s Congress where the CCP is set to tighten control over several key institutions. Atlanta Fed President Raphael Bostic supports a 25bps rate hike which bumps up U.S. indices while the 2-year Treasury bill to its highest level in a decade. At the G20 in New Delhi, India, U.S. Secretary of State Antony Blinken slams Moscow’s aggression following a brief meeting with his Russian counterpart Sergei Lavrov. It’s the first time the two have met in person since the invasion of Ukraine. Oil is on track for weekly gains but Saudi Aramco CEO Amin Nasser tells CNBC he is concerned about under-investment as Chinese demand returns.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Tesla held its annual investor day but Elon Musk’s Master Plan 3 fails to deliver specific details despite a pledge to halve assembly line costs. The EV maker’s shares fell in extended trading. The U.S. 10-year Treasury yield hits 4 per cent for the same time since November. Equities plunge as investors struggle to accept a persistently higher rate environment. Minneapolis Fed President Neel Kashkari says he is likely to keep pushing rates higher this spring. In Europe, markets are down and bond yields climb to multi-year high as Germany warns of rising inflation. We hear from Bundesbank President Joachim Nagel who says he expects the ECB to keep hiking rates over the coming months. In the UK, however, BoE Governor Andrew Bailey says further rate hikes are not a given. And in banking news, activist investors are demanding a vote at the HSBC AGM in May as they seek to spin off the lender’s successful Asian business units.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice

Chinese PMI data rises at its fastest pace in more than a decade, pushing Asian indices into positive territory. However, Wall Street finishes February in the red, its second negative month in three. The 10-year Treasury bill briefly nudges its highest rate since November on the back of stickier inflation concerns. Goldman Sachs’ investor day flops with CEO David Solomon suggesting a potential sale of parts of its consumer banking arm after mistakes were made. Spanish lender Santander is to return half of its profits to shareholders as it targets ROTE of up to 17 per cent as part of its new three-year strategy. Executive chairman Ana Botin tells CNBC higher rates have pushed the bank to deliver record FY profits. And we are live in Barcelona at Mobile World Congress where Cisco CEO Chuck Robbins tells us A.I. opportunities for telcos are limitless.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

UK Prime Minister Rishi Sunak seeks support for the new Northern Ireland Brexit trade agreement with the EU. We are live in Westminster for the latest. U.S. indices are up but still on track to record February in the red. Europe’s STOXX 600, however, surges, more than doubling the S&P 500’s return so far for 2023. Recruitment firm Adecco posts rising Q4 revenue but net profit is down 65 per cent. And in telco news, as Huawei spin-off Honor moves into the foldable smartphone market, we hear from EY CEO Carmine Di Sibio at Barcelona’s Mobile World Congress who says U.S. relations with China will continue deteriorating as firms seeks to move supply chains out of the country.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. indices suffered their worst week of the year so far following disappointing inflation data. Cleveland Federal Reserve President Loretta Mester tells CNBC that she will maintain her rate stance to help rein in price stability. Billionaire investor Warren Buffett defends share buybacks following criticism of the practice as Berkshire Hathaway posts a $23bn annual net loss. UK Prime Minister Rishi Sunak is to hold talks with European Commission President Ursula Von Der Leyen today in a final bid to secure a new Brexit deal for Northern Ireland. German lender Commerzbank is due to relist on the DAX after a four-year absence to make way for then-rising star Wirecard.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Today marks the sombre one-year anniversary of Russia’s invasion of Ukraine. Leaders of G-7 nations and many others around the world pledge further support to Kyiv, condemning Moscow’s invasion. The S&P 500 is finally in the green following a four-day losing streak – its worst week of 2023 so far. JP Morgan CEO Jamie Dimon tells our colleagues Stateside that the Federal Reserve has lost some control over inflation and that interest rates could still hit 6 per cent. In Japan, inflation hits a 41-year high but incoming BoJ governor Kazuo Ueda believes it to be “appropriate” to maintain the country’s ultra-loose monetary policy. And in crypto news, former FTX CEO Sam Bankman-Fried faces several new federal charges including conspiring to make illegal political donations and banking fraud.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The S&P 500 lists its fourth day of losses as Federal Reserve minutes show the central bank is determined to bring rates down. St Louis President James Bullard tells CNBC the Fed is ready to react should inflation refuse to budge. Russian President Putin hosts Chinese Foreign Minister Wang Yi in Moscow in a show of deepening ties between the two countries. In Warsaw, Bucharest 9 leaders pledge to shore up NATO’s eastern flank with Sweden and Finland pushing for their speedy accession into the alliance. We hear from Swedish defence minister Pål Jonson who says NATO will benefit from the two Nordic nations’ specific assets and capabilities.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Dow suffers its worst day of the year so far, falling almost 700 points and Treasury yields are at fresh highs. Cautious U.S. retail guidance has increased concerns over consumer demand. In Japan, the central bank buys up more emergency bonds after the 10-year JGB crosses a key limit for the second trading session. Russia withdraws from the landmark START deal with the U.S. sparking fears of nuclear tests being resumed by Moscow. We are live in Warsaw where President Biden pledges unwavering support for Ukraine in a key speech ahead of the one-year anniversary of the Russian invasion. We are also live in Stockholm where the leaders of Sweden and Finland urge Turkey to approve their countries’ accession to NATO. And in gaming news, Microsoft holds talks with EU officials to approve its planned $69bn acquisition of ‘Call of Duty’ maker Activision Blizzard.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

High interest rates and China’s post-Covid reopening helps to double HSBC’s quarterly pre-tax profit. CEO Noel Quinn tells CNBC that the forecast for 2023 remains positive. U.S. President Joe Biden arrives back in Poland following his surprise trip to Kyiv where he promised President Volodomyr Zelenskyy additional military support and unity in the face of Russian aggression. We are live in Warsaw ahead of the one-year anniversary of Moscow’s invasion of Ukraine. BHP sees profits fall in H1, prompting the miner to cut its dividend. However, CEO Mike Henry is confident Chinese metals demand will pick up as the country reopens.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The U.S. and China exchange diplomatic barbs over the weekend during the Munich Security Conference following the shooting down of a suspected Chinese spy balloon earlier this month. Almost one year after the Russian invasion of Ukraine, NATO Secretary-General Jens Stoltenberg tells CNBC that Beijing will be watching the outcome of the war closely. As EU leaders discuss massive additional military support to Kyiv, we hear from Ukrainian Foreign Minister Dmytro Kuleba who denies allegations of corruption at the top his government.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. producer prices rise more than expected fuelling new inflation fears and sending U.S. indices more than 1 per cent into the red. Asian markets follow suit. The Fed Reserve’s Loretta Mester and James Bullard both call for a return to 50bps hikes in March in a bid to temper inflation. President Biden has pledged to address last week’s spy balloon incident with Chinese President Xi Jinping with U.S. authorities set to hold bilateral talks with their Chinese counterparts at this weekend’s Munich Security Conference. China Renaissance shares fall after it is revealed the boutique advisory company’s CEO Bao Fan is missing amid reports the dealmaker may have fallen foul of Beijing. And in autos news, Tesla will install an upgrade to its self-driving system in 360,000 vehicles over crash concerns.    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Standard Chartered posts a 28 per cent surge in full-year profits and also launches a $1bn share buy-back programme. U.S. consumers brush aside cost concerns with retail sales hitting their highest monthly gain in almost two years. In aviation news, Airbus outperforms expectations with a 16 per cent rise in full-year profits. However, the plane maker remains cautious on delivery targets which remain in line with last year. Tesla agrees to share its charging points with other EVs to boost President Biden’s green federal funding package.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. inflation is down in January but still comes in hotter than expected at 6.4 per cent. Global markets are slightly down with only the Nasdaq posting a positive session. TSMC shares sell off after Berkshire Hathaway cuts its stake in the chip maker by more than 85 per cent while increasing its Apple holdings. In luxury news, LVMH appoints U.S. rapper Pharrell Williams to lead its menswear design arm.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.