Market review march
Confidence and decadence
"Confidence and decadence". This could be the title of a literary work by Stendhal, but unfortunately it is the conclusion of the 167-year history of Credit Suisse. The decline of the investment bank, which was mired in business scandals for years and the end of depositor confidence, accelerated the downfall of Switzerland's second largest bank. A rapid demise that raises fears for employment in a country with a bloated banking sector.
The sudden merger of Credit Suisse with UBS has obviously had a major impact on the financial markets. Swiss equities are giving back all the gains of the year, unlike the other equity markets which have remained positive since 1 January.
Interest rates fell sharply in March. This is a sign that investors are anticipating an end to the rise in interest rates, which is weighing heavily on the banking sector. Swiss real estate is once again under pressure at the end of winter.
Currencies are depreciating against the CHF in a search for safety. This is also the reason for the major rise in gold. Oil, in anticipation of a recession, continues to decline during the quarter.
The risk indicators are rising on almost all components.
XO Risk Aversion Index - Composite 250D
XO Risk Aversion Index - Components