It was a black day on the Paris stock exchange, which closed down 3.58% at 6,885 points, plunged by the collapse of banking stocks, with Société Générale down 12%, BNP Paribas down 10%, Crédit Agricole down 5%... trading was even suspended at lunchtime.

The markets now fear that the bankruptcies of SVB and Signature Bank are merely the beginnings of a much deeper crisis, which has been brewing for months in the balance sheets of major banks, the result of poor risk management (underestimated, poorly modeled) when the cost of money was zero.

After the shockwaves of the SVB and Signature Bank bankruptcies, a much bigger and more explosive story is emerging: Credit Suisse is ceding over 24% to Zurich - let down by its main Saudi shareholder - which seems to be making its probable bankruptcy official (anticipated at over 50%, if CDSs soaring towards 900Pts are anything to go by).

As with Lehman, the collapse of a systemic bank puts all its counterparties at risk.

In this context, the silence of the Swiss authorities is incomprehensible. In fact, Bruno Lemaire has asked for a meeting with his Swiss counterpart this evening - and he can't be the only one...

While Crédit Suisse's difficulties are nothing new, the sudden rise in interest rates seems to have hastened its downfall: how many of its borrowing customers are finding themselves in difficulty due to the rise in the cost of money... which keeps pace with inflation?

In this climate, the day's figures take a back seat: in Europe, investors have taken note of the latest inflation data for France. The consumer price index (CPI) rose by 1.0% month-on-month in February 2023, after +0.4% in January. According to Insee, inflation thus rose to 6.3% year-on-year.

In the United States, the New York Fed's Empire State index fell from -5.8 in February to -24.6 this month (consensus -7.4).

The new orders index fell by fourteen points to -21.7, indicating that orders have dropped considerably, and the shipments index fell by fourteen points to -13.4, indicating a drop in shipments.
U.S. business inventories fell in January, due in part to a sharp rise in sales, according to data published Wednesday by the Commerce Department.

Inventories fell by 0.1% last month, after rising by a revised 0.3% in December.
Business sales rose by 1.5%, after falling by 0.6% the previous month. On an annual basis, they are up by 5%.

At the current rate, it will therefore take them 1.34 months to clear their inventories, compared with 1.36 months in December.

Producer prices in the USA were a pleasant surprise, falling unexpectedly by -0.1% in February (consensus was +0.3%), with the sharp drop in food prices adding to the downturn in energy costs.

Year-on-year, inflation rose by 4.6%, compared with 6% the previous month, confirming the moderation in inflation seen in recent months.

Core inflation edged up by 0.2%, following a 0.5% rise in January, and now stands at 4.4% annualized, after 4.5% the previous month.

Interest rates are easing sharply in Europe - the ECB is likely to abandon its plan to raise rates by 50 basis points and settle for 25 basis points, or even "pass": the Euro's -1.8% fall towards $1.0550 seems to indicate that well-informed traders know that the ECB will seek to reassure the markets.

Long yields eased by -30pts on our OATs (-48pts on the 2-year at 2.545%) and by -31pts on Bunds, while US T-Bonds fell by -22pts to 3.415%.

The most spectacular fall was on US short-term yields, with the 2-year falling by -50pts to 3.80%, while the 1-year erased -35pts to 4.12% (versus 5.25% a week earlier).

In French company news, Thales announced on Wednesday that it plans to strengthen the US presence of OneWelcome, the identity management platform it recently acquired.

Eutelstat Communications announced that StarGroup, a provider of telecommunications and entertainment services in Mexico, had again selected it for StarTV, its direct-to-home (DTH) pay-TV service.

Seb announced on Wednesday that it would be opening a new production line at its Saint-Lô industrial site, which specializes in the manufacture of electronic cards.

Finally, TotalEnergies and Paprec, France's leading plastic recycling company, have signed a long-term commercial agreement to develop France's first chemical recycling chain for plastic film waste.

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