This weekend, UBS made a big move in the banking sector when they agreed to purchase Credit Suisse. In doing so, they are reportedly aiming to decrease its size by 8 billion dollars while also injecting 3.2B into it – however holders of the riskiest bonds valued at 17 billion are set to be wiped out as part of this restructuring effort.

Now all eyes turn towards what will happen Wednesday with the Federal Open Market Committee (FOMC) policy statement release and whether or not rates should increase by 25 basis points for March; although markets remain divided about this decision, analysts believe that any announcement is likely going to focus on softening language regarding expectations moving forward rather than any concrete changes being implemented immediately.

The recent turbulent state of banking institutions such as Credit Suisse has raised questions and concerns among many. Despite the overindulgence in questionable practices, it is important to remember that one issue does not speak for an entire industry – sometimes a business can suffer from poor customer relations without revealing any wider system vulnerability. This was evident with Credit Suisse’s liquidity crisis due to dwindling customers numbers more than anything else.

Three Things: These are the three areas that have the greatest ability to impact rates this week.

1. Bank Run – The financial landscape has been in flux the past few weeks, with Credit Suisse recently being purchased by UBS and backed up with Swiss National Bank’s funds – but will it be enough to patch Europe’s banking system woes? Meanwhile in the US, a ripple effect is still playing out from several troubled banks. All eyes are on whether these events bring about stability or further disruption.
2. The Fed – On Wednesday, the outcome of a heated debate in the Federal Reserve will be revealed with their announcement on interest rates. The bond market is closely watching to see whether they choose to pause or increase by 25 basis points and set an indication for what lies ahead. All eyes are then going to turn towards the Fed’s Economic Projections which could provide insight into where this roller coaster ride may end up when it comes time for determining future rate hikes and maximums before pivoting back down again.
3. Central Banks- Financial markets around the world eagerly await news from two of Europe’s most influential central banks – The Bank of England and Swiss National Bank. Their key interest rate decisions can cause seismic shifts in global investment strategies, making these announcements highly anticipated events for investors worldwide.

The UMBS 5.5 coupon refers to a type of investment product known as a mortgage backed security, which is used to fund mortgages. It is currently trading at a price of 100.94, up just a few basis points at +5bps (a measure of percentage points) for the day.

Meanwhile, the 10-year Treasury yield refers to the interest rate the government pays to borrow money for 10 years. It is currently at a rate of 3.41%, with 3.40 continuing to act as a resistance level from further improvement.