On Wednesday, Credit Suisse, the Swiss bank, became the catalyst for a new correction, with its shares losing over 28% in pre-market trading. The reason for collapse was a report that the Saudi fund, which had previously invested in the bank, had excluded further support, citing "regulatory restrictions." Additionally, there are rumours of the bank's unstable financial position due to recent shocks. Although the price rebounded subsequently, the risks of a default of a systemically significant bank, which threaten a "domino effect," lead to the classic rotation of investors from risky assets to bonds which is unlikely to cease soon.

 US indices are currently down about 1.5%, while losses in Europe are approaching 3%. The yield on 10-year US bonds has exceeded 3.5% and offers a yield to maturity of 3.44% at the moment, which is the lowest level since the beginning of February. It is worth recalling that this corresponded to roughly one Fed rate hike of 25 basis points at that time, which allows us to roughly estimate investors' current expectations. The yield to maturity of two-year bonds has fallen significantly, to a minimum since September 2022. The dynamics of long Treasuries relative to short ones indicate a sharp increase in expectations that inflation will soon slow down and the Fed will soon be forced to tap on gas pedal again to stimulate activity.

Currency and commodity markets are also in turmoil, with European currencies falling by about 1% and the safe heaven yen rising by 0.9%. However, this time, the Swiss franc, which is usually a safe haven too, is down 1% against the dollar due to concerns that the crisis related to Credit Suisse could engulf the entire Swiss economy. The oil market has collapsed, with both key grades losing about 5%, which clearly indicates a rise in expectations of a global recession due to demand contraction. The price of gold continued to rise and surpassed the $1925 mark for the first time since the beginning of February.

Data on retail sales and production inflation in the US provided minimal support despite the absence of negative surprises. It is worth noting even the decrease in PPI on a monthly basis, which theoretically increases the chance of soft Fed decisions on upcoming expectations, but the market is guided by risk-off sentiment.

In the near future, it is likely to expect further strengthening of the dollar as the main safe heaven asset, as the panic in the US banking sector has been extinguished. In addition, there is a high probability that gold prices will test resistance at $1950, which was the peak of this year.