The coco bond market has endured its Paradise Lost moment.
The main index has fallen nearly 8 per cent this year after returning 7 per cent in 2015 – practically utopian, in the current rates environment. Some names – Deutsche, UniCredit, Banco Popular – have experienced the distress of trading below 75 cents on the euro.
Let’s briefly set aside these qualms of heart-sick malady. Let’s turn instead to the mostly untold tale of a $2.5bn Credit Suisse 6.25 dollar-denominated AT1 bond. CS 6.25, as we’ll call it. Read more
Credit Suisse at pixel…
Something to do with it reporting its first annual loss since 2008, perhaps? Read more
Credit Suisse has a new report out on the winners and losers of the recent rout in global natural resource prices. While everyone has been paying attention to the remarkable decline in the value of oil, agricultural commodities and industrial metals have also become a lot cheaper recently:
The CS annual Wealth Report is now in its fifth year. Click the pyramid to read. Read more
Study this chart carefully. It’s the first day of dealings in Zalander, the Frankfurt-listed online frock shop that claims to be Europe’s biggest.
We detect a theme. It may be that with financial markets becalmed a new subject is needed. Perhaps it reflects the way Piketty has become an instant bookshop-to-shelf classic, but something has investment strategists reaching for insight from an eighth century theologian.
“And those people should not be listened to who keep saying the voice of the people is the voice of God, since the riotousness of the crowd is very close to madness.” — Alcuin to Charlemagne, 798 A.D. Read more
Claudius was a Roman emperor from AD 41 to 54.
Claudius notes are Tier 1 instruments that were issued by Credit Suisse back in 2010 and which feature a call date that first comes into effect in December 2015. Except, as bank bond investors have experienced from time to time, the issuers of such securities have an unnerving tendency to sometimes behave unexpectedly. Credit Suisse made some noise when it released earnings last week that it may call the Claudius bonds thanks to something known as a “regulatory par call.” Read more
Rattled by the equity sell-off?
Here’s an antidote…five pages of potential bid targets, courtesy of Andrew Garthwaite and team at Credit Suisse… Read more
Word reaches us that the Credit Suisse axe will swing on Wednesday, with 50 heads to roll in the rates division as it bears the greatest brunt of cuts to fixed income, credit and commodities trading.
The Swiss bank has followed the lead of UBS in deciding that core fixed income trading is just too expensive, now that the whole flight to safety trade is over and lucrative over the counter business is dwindling. Read more
From Credit Suisse’s newly-minted Global Wealth Report. Click to enlarge…
You’ve got to admire the audacity of Credit Suisse, Deutsche Bank, BofA Merrill Lynch and Citi: they’ve agreed to underwrite the £5.8bn Barclays rights issue, pitched at 185p on a 1-for-4 basis. Read more
Like other Europe-focused strategists, William Porter at Credit Suisse has had some fun scrolling through the IMF’s mea culpa on Greece.
He notes that the IMF now admits that its actions were affected by a fear of market contagion, a misunderstanding of how to do a restructuring within a currency union and, most importantly perhaps, a dysfunctional dynamic within the Troika itself. Read more
Worried about the Fed’s taper tactics? Maybe Abe’s poisoned third arrow?
Andrew Garthwaite’s not. The Credit Suisse equity strategist has just hiked his S&P 500 forecast to 1,730 (from 1,640). For 2014 he’s going for 1900. Yes, Garthwaite sees another 15 per cent… Read more
Don’t mean to scare-monger, but consider this chart, plucked from a Credit Suisse note penned by Yiagos Alexopoulos and team. On the bank’s number crunching, the UK is just one of just two countries where fiscal stress has worsened this year — the other being Slovenia…
William Porter at Credit Suisse has been mulling the market’s muted reaction to the Italian elections. Increased stress is no longer finding its way into widening spreads, thanks to the Draghi “put”.
This credit strategist is concerned. A dampened signaling mechanism increases the risk of something going badly wrong — a market crash, even. Read more
Are you a Swiss bank? Do you have haven appeal? Want to make some quick, easy money? Then keep reading…
Credit Suisse has decided it will start charging negative rates on Swiss franc cash balances above a certain threshold. From CS: Read more
Credit Suisse has totally bored Matt Levine at Dealbreaker with their latest earnings announcement.
There are only so many ways to outperform in banking. But these days balance sheets are constrained, regulations are biting, and financial ‘innovation’ raises eyebrows. It’s just dull, in some respects.
Here’s Matt, bemoaning the utterings of Credit Suisse CEO Brady Dougan:
I had so much hope!
Or peripheral pain in terms of growth/shrinkage in compensation per employee. It offers a striking illustration of why both Greeks and Germans have reason to feel peeved… Read more
The British government ran a campaign during the Olympics promoting how GREAT Great Britain is. It wasn’t the most subtle of messages, but a fitting promo for The Bearded One.
Most bases were have covered, from heritage to innovation to shopping. The one thing they missed is the economy. Read more
James Sweeney, Jonathan Wilmot and the rest of the Credit Suisse gang that brought you the excellent King Collateral paper in April are back with a short follow-up note.
It’s a sharp contrast between the state of the global economy five years ago — when the first warning signs of an unusually serious crisis began to emerge — and where we are now. The framework of risk purging versus risk accumulation used by the authors is especially interesting, though they don’t get into as much detail as found in some of their previous notes. Read more
This is kinda sweet. From Fitch:
The Swiss National Bank’s (SNB) statement that UBS (‘A’/Stable/’a-’) and Credit Suisse Group (‘A’/Stable/’a’) should promptly improve their loss-absorbing capacity confirms that Switzerland maintains one of Europe’s strictest supervisory frameworks for banks, Fitch Ratings says. Read more
Get this. Jonathan Wilmot, chief global strategist at Credit Suisse, reckons that Europe is set to lead a rebound in global growth this year. He and his team are saying BUY Spanish and Italian bonds, and probably equities as well.
While a note dispatched to CS clients this week contains a few escape chutes, the core bullish argument is broadly as follows: Read more
Just in case anyone thought we’d gone soft on Sarko…
From Andrew Garthwaite at Credit Suisse on Wednesday: Read more
Are volatility-linked exchange-traded products (ETPs) getting too big for the Vix futures market? Are they comprising the price discovery role of Vix futures? Are they the reason why implied volatility curves have become steeply elevated?
As it turns out, Barclays Capital’s equity strategy team apparently thinks yes, it is possible (H/T the FT’s Ajay Makan). Read more
Last week a rather interesting thing happened in the world of volatility ETNs. The VelocityShares 2x short-term Vix futures ETN, backed by Credit Suisse and known as TVIX, announced that after a brief period of suspended issuance it would reopen the note to issuance orders from market makers.
It had previously closed issuance on February 21 citing “internal limits” at Credit Suisse. Read more
There’s been a lot of talk about the carnage in the TVIX on Thursday. The VelocityShares 2x short-term ETN, whose new issues were suspended by Credit Suisse on February 21 due to “internal limits”, fell 29 per cent. Curiously, the slide came just before an announcement from the provider that some level of issuance would be reinstated.
Understandably, the idea that the re-opening was leaked ahead of time is now doing the rounds. After all, why would the ETN, which had been trading at an 80 per cent premium to NAV, suddenly converge with its indicative value for any other reason? Read more
Summary: Credit Suisse bond salesman Nicholas Kyprios goofs around with clients ahead of a bond issue. No suspect trading is undertaken, there are no suspicious price movements, and in any case most of the bonds that might have been affected do not fall under the FSA market abuse regime.
No matter: Read more