ECB rate hike expected after Swiss support for Credit Suisse

By Mark Jones

LONDON, Mar 16 (Reuters) – Los mercados europeos repuntaban el jueves, ya que el rescate de 50,000 millones de francos suizos (53,940 millones de dólares) al atribulado banco Credit Suisse prepared a los operators para la posterior decisión del Banco Central Europeo sobre tasas of interest.

* Credit Suisse shares jumped more than 20% and major European indices (.EU) and the Swiss franc gained around 1% in early trading, after the Swiss National Bank and financial regulator FINMA announced that action would be taken on Wednesday evening.

* European bank stocks rebounded 2.3% after suffering their biggest daily decline in more than a year in the previous session, while fixed income traders again sold bonds State safe havens ahead of the ECB’s later rate decision.

* “I fear that the ECB is not paying enough attention to this risk (banking sector problems) and that could be a mistake,” said Stefan Gerlach, chief economist at EFG bank Zurich and former vice- Governor of the Irish Central Bank. .

* Last week shows what happens when major central banks like the US Federal Reserve and the ECB raise rates by hundreds of basis points in a short period of time, he added.

* “Every time you do something this big, you know there’s a risk somewhere in the financial system,” Gerlach said. “It’s like stretching a rubber band, if you keep stretching it, will it break?”

* German two-year bond yields, highly sensitive to rate expectations, rose 16 basis points (bps) to 2.55% after falling 54 bps on Wednesday in what was a rush to safety on the whole of the market.

* Overnight, Asian stocks fell about 1%, but that was largely a rallying move, without the frenzy seen in Europe the day before.

* Wall Street futures also indicated a steady start later as demand for the dollar and gold waned, traditional investor bets during the market turmoil.

* The MSCI Asia-Pacific ex-Japan equity index fell 1% to its lowest level for the year. Shares of Japanese banks, which are also seen as vulnerable to rate hikes, recouped some of the early losses but ended up losing 3.25%.

* Two-year US Treasuries are having their best week since 1987 and yields, which fall when prices rise, are down more than 66 basis points since Friday.

* The euro rose 0.3% to $1.0612 and the Swiss franc rose 0.9% to 0.9267 to the dollar. Safety preferences continued to support the yen, which rose 0.4% to 132.89 to the dollar.

* Oil prices also recovered some ground after falling to 15-month lows the day before. Brent crude futures rose 60 cents, or 0.8%, to $74.29 a barrel, while U.S. West Texas Intermediate (WTI) futures rose to $68.08.

(Edited in Spanish by Carlos Serrano)