Yesterday, the UK arm of Silicon Valley Bank (SVB UK), was bought by British multinational banking and financial services organisation, HSBC. SVB, which has a balance sheet of £8.8bn, was bought for only £1 following its collapse.
HSBC group chief executive, Noel Quinn, said, that buying the UK arm of SVB strengthens Britain’s commercial banking franchise and “enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally”.
The impact of the banking crisis reverberated throughout the markets, with the GBP/USD rate gaining 0.5% on the day. US stock indexes gave mixed performances yesterday. The Dow ended the day 90 points lower (after gaining 200 points) and the S&P 500 lost 0.1%. The Nasdaq 100 on the other hand added 0.4%.
European equity markets also suffered with stocks tumbling two-month lows on Monday, after the collapse of SVB sent European banks to their worst day in over a year. The Stoxx 600 declined 2.3% and the Stoxx bank index fell more than 5% after HSBC acquired the bank.
On the data front, investors have a busy day ahead.
We’ve just seen the the number of employed people in the UK increase by 65,000, well-above market forecasts of a 52,000 increase.
The U.S. Bureau of Labor Statistics will release the latest inflation data at lunchtime – markets are expecting the rate to fall to 6%, which would mark the lowest level since September 2021, compared to 6.4% in January.
Many will also be keeping a close eye on the latest inflation data from Spain.
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