Markets finally broke out of their range-bound trading this week amid major banking-sector concerns. Having been locked into an $80-85/B range since the start of 2023, prices broke to the downside this week with Brent futures settling at $73.69/B on 15 March, the lowest level since 20 December 2021, before rebounding slightly.
The recent collapse of US lender Silicon Valley Bank sparked concerns of contagion, and days later Credit Suisse was forced to announce a facility to borrow up to $54bn from the Swiss central bank in a bid to calm investors after a sharp drop in its share price. The banking-sector upheaval is a direct result of the sharp interest rate increases in Europe and the US as central banks seek to dampen inflation. While immediate concerns over Credit Suisse have eased, further shocks to the financial system can’t be ruled out. (CONTINUED - 865 WORDS)