It's Credit Suisse that needed dollars, right? And the SNB placed the order?
From ZeroHedge, October 14:
BofA Chief Investment Strategist Michael Hartnett (whose latest weekly note we will dissect shortly) has a favorite saying for when critical phase (to avoid the most hated word in the world "paradigm") shifts take place in the market, one which may be the only word a trader in this day and age needs (or rather hopes for): "Markets stop panicking when central banks start panicking."
So in what may be the best news to shellshocked bulls after the worst September and worst Q3 in generations, in a harrowing year for markets, and on a Friday which is set to reverse much of yesterday's historic intraday reversal, the 5th biggest on record, central banks are starting to panic more with every passing day. First it was the BOJ, then the BOE and now, for the second week in a row, it's Switzerland's turn.
Recall that three weeks ago after the (first) panicked pivot by the BOE, when global markets were in freefall, we said that markets desperately needed some words of encouragement from the Fed, or failing that - and with the dollar soaring to new all time highs every day - the Fed had to make some pre-emptive announcement on USD Fx swap lines, if only to reassure global markets that amid this historic, US dollar short squeeze, at least someone can and will print as many as are needed to avoid systemic collapse.
So fast forward two weeks to October 5, when there still hasn't been any formal announcement from the Fed, but ever so quietly the Fed shuttled $3.1 billion to the Swiss National Bank to cover an emergency dollar shortfall, as we first reported a few days ago.
Remarkably, this was the first time the Fed sent dollars to the SNB this year, and the first time the Fed used the swap line in size (besides a token amount to the ECB every now and then)!
But it certainly won't be the last time - as we have warned, expect far wider use of Fed swap line usage as the world chokes on the global dollar shortage - and sure enough overnight the Fed announced that as of Thursday it doubled the size of its USD swap with the world's most pristine economy and its central bank, the Swiss National Bank, sending some $6.27 billion to avoid an emergency funding crunch....
....MUCH MORE
