Japan's yen climbed on Monday as investors reacted nervously to UBS' cut-price takeover of its beleaguered rival Credit Suisse. Under the deal, holders of $17 billion of Credit Suisse Additional Tier-1 bonds will be wiped out. The yen - long seen as a safe haven at times of stress - rallied as a fall in Asian bank stocks overnight spread to Europe on Monday.
Global banks borrowed only token amounts on Monday via an enhanced, seven-day dollar swap unveiled by the U.S. Federal Reserve late on Sunday to ease funding stress in global markets.
Global banks borrowed only token amounts on Monday via an enhanced, seven-day dollar swap unveiled by the U.S. Federal Reserve late on Sunday to ease funding stress in global markets.
Emerging market stocks fell on Monday, with Hong Kong shares hitting three-month lows as UBS's bailout of Credit Suisse did little to stem fears of banking sector contagion, while South Africa's rand dipped ahead of anti-government protests. The MSCI's index for emerging market stocks fell 1%, with Hong Kong's Hang Seng index ending 2.7% lower.
Japan's yen rallied on Monday as investors sought out safe assets after UBS' cut-price takeover of its beleaguered rival Credit Suisse failed to quell market nerves. Under the deal, holders of $17 billion of Credit Suisse additional tier-1 bonds will be wiped out.
The safe-haven yen rebounded from early steep declines and the risk-sensitive Australian and New Zealand dollars flipped to losses as early optimism ebbed over efforts by global authorities to contain a banking crisis.
Safe-haven currencies the yen and U.S. dollar recovered from early steep declines and the risk-sensitive Australian and New Zealand dollars flipped to losses as early optimism ebbed over efforts by global authorities to contain a banking crisis.
The dollar slid on Monday as investors reacted to UBS' cut-price takeover of its beleaguered rival Credit Suisse CSGN.S. UBS UBSG.S agreed to buy Credit Suisse on Sunday for 3 billion Swiss francs and assume up to $5.4 billion in losses, in a shotgun merger engineered by Swiss authorities. Meanwhile, growth assets such as bitcoin BTC= enjoyed a bounce.
Currency markets showed some cautious optimism after global authorities moved to stem contagion from a simmering banking crisis, with the safe haven dollar on the back foot and the yen tumbling amid a rebound in Treasury yields. The risk-sensitive Australian dollar jumped to a two-week high, while the euro edged higher for a third straight day.
Top central banks, faced with the risk of a fast-moving loss of confidence in the stability of the financial system, moved on Sunday to bolster the flow of cash around the world. In coordination with central banks elsewhere, the U.S. Federal Reserve offered daily currency swaps to ensure banks in Canada, Britain, Japan, Switzerland and the euro zone would have the dollars needed to operate.
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