ASX 200 trims losses amid employment data and Credit Suisse $80b central bank loan

Switzerland's second-biggest bank has accepted a central bank bailout after a 24% plunge in its stock price overnight.

| More on:
An older man wearing glasses and a pink shirt sits back on his lounge with his hands behind his head and blowing air out of his cheeks.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Credit Suisse is taking out an A$80 billion loan with Switzerland's central bank to shore up its liquidity after a 24% fall in its share price overnight 
  • New labour force data released by the Australian Bureau of Statistics has surprised the market, with unemployment falling back to its December level of 3.5% 
  • The ASX 200 is recovering after a more than 150-point drop in morning trade and is now down 101 points, or 1.43% 

S&P/ASX 200 (ASX: XJO) shares are rebounding on news of stronger-than-expected jobs data and an $80 billion central bank bailout for Switzerland's second-largest bank.

During morning trade, the benchmark ASX 200 index fell by more than 150 points following dramatic trading sessions across Europe and in the United States overnight.

At the time of writing, the ASX 200 has recovered somewhat to be down 101 points, or 1.43%.

What's helping the ASX 200 recover this afternoon?

Credit Suisse Group AG has announced it is taking out an A$81 billion loan from Switzerland's central bank.

This follows a 24% plunge in Credit Suisse shares overnight after its major shareholder refused to up their stake.

This caused a bank share rout in France, Germany, the United States, and here in Australia this morning.

Credit Suisse has been besieged by various problems over time, with its market capitalisation halved since 2021.

The bank's shares have tumbled by more than 50% since early February.

In a statement, Credit Suisse said:

Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralized by high quality assets.

Credit Suisse also announces offers by Credit Suisse International to repurchase certain OpCo senior debt securities for cash of up to approximately CHF 3 billion.

The cash tender on 10 US-dollar-denominated senior debt securities will expire on Wednesday, 22 March.

What other news is pushing the ASX 200 higher?

The Australian Bureau of Statistics has released its monthly labour force data today.

The data revealed a surprise fall in the seasonally adjusted unemployment rate to 3.5%.

This is back to where it was in December. The rate went up to 3.7% in January.

ABS head of labour statistics Bjorn Jarvis said:

The latest monthly increase in trend employment was only slightly below the monthly average for the 20 years before the pandemic.

This now shows that, while underlying employment growth has slowed down compared with what we saw through much of 2022, it is still increasing at close to its long-term historical rate.

The better-than-expected data indicates the economy is still doing well despite inflationary pressure.

Low unemployment indicates businesses are thriving, which is why the ASX 200 is up on the news.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A group of businesspeople clapping.
Broker Notes

2 of the best ASX 200 shares to buy in the Asia-Pacific

Goldman Sachs is speaking very highly about these stocks this month.

Read more »

A Santa hat sits atop a till containing Australian currency in dollar notes and coins, indicating the costs experienced at Christmas.
Share Market News

Which ASX 200 company insiders traded shares over the Christmas holidays?

We reveal a few company executive buyers and sellers over the holidays.

Read more »

A man looking at his laptop and thinking.
Share Market News

5 things to watch on the ASX 200 on Wednesday

Here's what to watch on the local market today. Will it be a good session?

Read more »

A group of businesspeople clapping.
Best Shares

Best ASX 200 share of each market sector in 2024

Here are the No. 1 stocks for price growth in each of the 11 market sectors for 2024.

Read more »

Share Market News

Here are the top 10 ASX 200 shares today

Investors enjoyed a pleasant ASX session this Tuesday...

Read more »

Three people skydiving.
52-Week Lows

These ASX tech stocks just hit multi-year lows! Are they cheap?

A cheap share isn't always a bargain...

Read more »

rising medical asx share price represented by excited doctors dancing in ward
Healthcare Shares

Up 77% in a month! What's going on with the Mesoblast share price?

This stock has blown the lights out in recent weeks...

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Capricorn Metals, IDP Education, Life360, and Opthea shares are storming higher

These shares are having a good session on Tuesday. But why? Let's find out.

Read more »