Major central banks join forces to stem financial contagion. The world's largest central banks have come together to stop a banking crisis from spreading, after the Swiss financial authorities succeeded in convincing multinational investment bank UBS to acquire its troubled rival Credit Suisse in a historic deal. Leading central banks including the Federal Reserve, the European Central Bank, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank announced a joint action late on Sunday 19th March to increase global liquidity. The second and third biggest bank failures in US history earlier this month triggered market uncertainty, threatening to make it harder for people to borrow money, US Treasury Secretary Janet Yellen said last week.
Sharp fall in German economic confidence in March. Economic sentiment among German investors fell for the first time in six months following the recent turmoil in the global banking sector that added to the worries of inflation faced by German companies and households. The ZEW Indicator of Economic Sentiment tumbled to 13.0 in March from 28.1 in February, the Mannheim-based think tank said. The index dropped after five successive months of improvement. Notwithstanding three months in a row of positive readings, the March reading was below economists' forecast of 17.1. The current situation index fell to -46.5 from -45.1 in the preceding month. The reading was forecast to improve to -44.3. "The international financial markets are under strong pressure," and the high level of uncertainty is reflected in the economic expectations, said ZEW President Achim Wambach.
UK inflation rate rises to 10.4 percent in February. British households continue to face high food and energy bills, while workers across various sectors have launched industrial action in recent months. According to the Office for National Statistics (ONS), the consumer prices index accelerated to 10.4 percent in February from 10.1 percent the prior month, with prices being driven higher by a rise in the cost of drinks, women’s clothes, meals out and fresh food due to acute shortages vegetables. "Food and non-alcoholic drink prices rose to their highest rate in over 45 years with particular increases for some salad and vegetable items as high energy costs and bad weather across parts of Europe led to shortages and rationing," ONS chief economist Grant Fitzner said.
US existing home sales increase for first time in a year. US existing home sales rebounded more than expected in February as lower mortgage rates and the first year-on-year decrease in prices in 11 years encouraged buyers to come back into the market. Existing-home sales soared by 14.5 percent to a seasonally-adjusted annual rate of 4.58 million in February, according to a report published on Thursday by the National Association of Realtors (NAR). The surge in sales reverses a full year of declines. February’s increase is the largest since July 2020, during the pandemic, when sales rose by 22.4 percent. “Homebuyers are taking advantage of any rate declines,” said Lawrence Yun, NAR’s chief economist. “We’re seeing stronger sales gains in areas where home prices are decreasing, and the local economies are adding jobs.”
China kept its benchmark lending rates unchanged for the seventh consecutive month in March, as expected, as the economy enjoys tailwinds from the policy actions taken recently as it recovers from the pandemic. The People’s Bank of China left the one-year loan prime rate (LPR), which influences most new and outstanding loans, unchanged at 3.65 percent. The over-five-year LPR, on which mortgage rates are usually based, stands at 4.3 percent. The LPR was last adjusted in August 2022, when the five-year rate was cut by 15 basis points and the one-year rate by five basis points.
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