Credit Suisse bond investors plot lawsuit against Switzerland
A group of international bond investors is drawing up plans to sue Switzerland in the US courts for expropriation over the losses they suffered after the state-orchestrated rescue of Credit Suisse. The case is being brought together by law firm Quinn Emanuel, according to people familiar with the matter. Quinn Emanuel is already suing Switzerland’s financial regulator, Finma, over its decision to wipe out $17bn of Credit Suisse bonds when the bank was taken over by UBS six months ago. Lawyers at Quinn Emanuel are laying the groundwork to sue Switzerland in the US, where they believe there is a greater chance of convincing a judge to waive the country’s sovereign immunity rights. The suit could be filed by the end of the year, though it is not certain to proceed, according to people involved in the discussions.
OOPS! A bank liquidity indicator sounds the alarm!
Usage of The Fed's emergency bank funding facility rose once again (+$208M) to a new record high over $108BN as long-term government bond yields keep rising... Source: Bloomberg
Rising Italian Yields and the Looming Debt Question: What Lies Ahead for Eurozone?
The 10-year Italian yield has reached its highest level since March, while the difference between the 10-year Italian and German yields is trading above 180bps for the first time since June. Beyond speculating on whether the ECB will raise interest rates to 4% or not, the significance of Italy's debt burden should be a fundamental concern, especially if they announce a new tightening of their monetary policy by ending reinvestments in their PEPP program or, worse still, making further disinvestments under the APP program.
Despite the rise in bond yields, the Nasdaq 100 held up better than the Dow and other US indices on Tuesday
Tuesday was the way the Nasdaq's second best performance relative to the Russell 2000 since November 2021, breaking out to a new cycle high. The last time Nasdaq/Russell 2000 traded here was March 2000 - the very peak of the dotcom bubble... Source: Bloomberg, www.zerohedge.com
More or less in tandem: US 10y yields and WTI oil price
Source: Bloomberg, HolgerZ
China's holdings of US Treasuries just reached its lowest level in 14 years
Now down almost $481B from peak levels. Source: Crescat Capital, Bloomberg
We are now seeing the widest spread between mortgage rates and 30-year risk-free rates in history
Should we see this as another barometer of credit tightness in the system? Source: Crescat Capital, Bloomberg
Recent Developments in the AT1/CoCo Bond Market: ZKB Unexpectedly Skips an AT1 Call!
After the Credit Suisse turmoil, the AT1/CoCo bond market is witnessing intriguing dynamics as Zürcher Kantonal Bank (ZKB) takes an unexpected turn by choosing to bypass an AT1 call. In a landscape where banks are carefully navigating refinancing challenges, this move adds a new layer of complexity to the market. ZKB's decision to forego the AT1 call comes in the wake of Banco Santander's similar choice, signaling a trend toward cautious financial strategies in the face of fluctuating market conditions. These recent developments are shedding light on the intricate decision-making processes that banks are employing to balance their financial stability and growth prospects.
