Worried traders strategize for Monday market turmoil

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(Bloomberg) — With the fate of Credit Suisse Group AG finally being decided, investors were bracing for another grueling week of trading.

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Just hours before the opening of Asian markets, managers chatted with nervous clients, planned strategies and conducted their next trades. Many drove home to their workplaces, settled in for a long night, and planned to be at the office before dawn.

“In the last hour, I already had a few calls with fund managers and one big client,” said Alberto Tochio, a fund manager at Kairos Partners in Milan. “From now on until late at night, I’ll be keeping up with the news and trying to figure out what to do early in the morning.”

While the news of Credit Suisse’s acquisition of UBS Group AG brought some relief to traders who were worried about going into Monday without a deal, there is still plenty of worry on Street. The turmoil at Credit Suisse and the collapse of three regional lenders has raised concerns about the health of the banking industry and brought back memories of the 2008 financial crisis.

The ‘unknown unknown’: no ​​weekend for traders as bank crisis persists

Shares of Credit Suisse have been hurt by a whirlwind of negative news over the past few years, with the stock down 98% from its peak in 2007, losing nearly $90 billion in market capitalization over that period. Last week’s renewed sell-off in the Swiss lender’s shares in the wake of the collapse of three US regional banks led to a 12% drop in the European banking sector index on the week.

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Mark Grant, chief global strategist at Colliers Securities, said retail customers and institutions are concerned about where their is being held. He said he is urging customers to be conservative as volatility in the financial system created by central banks is increasing rapidly.

“I’ve had a lot of calls over the weekend from clients and institutions,” he said. “We’ll see how things are in the morning, but I don’t expect them to be very good.”

Anthony Cohen, a senior listed derivatives broker at Market Securities, is taking calls from clients who wish to trade at the market open. “I have never seen so much volatility in bonds and stocks so far,” he said from Dubai. “However, I do not feel nervous yet with the way clients are trading.”

For other traders, turmoil means opportunity. Andrea Tueni, head of sales trading at Saxo Banque, said he the opportunity to start trading on Monday.

“Personally, I think when there is action, it is very good,” he added. “Of course, nobody is happy that it is getting tougher for some. But before that the market environment was flat with an inflation-recession-central banks combo and it was pretty repetitive.

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