World markets set for relief after Credit Suisse buyout

Financial markets were poised for relief on Monday after UBS Group AG agreed to buy Credit Suisse Group AG in a rescue orchestrated by the state, while major central banks announced a co-ordinated move to shore up liquidity in the financial system. In an early sign that risk appetite was set for a bounce, the euro, sterling and the Australian dollar all edged up, data from trading platform EBS and Reuters Dealing showed. Crypto currency bitcoin rose over 5%. UBS will buy rival Swiss bank Credit Suisse for 3 billion Swiss francs ($3.23 billion) and agreed to assume up to $5.4 billion in losses as it winds down the smaller peer’s investment bank after a shotgun merger engineered by Swiss authorities. Meanwhile, in a coordinated global response, central banks including the Federal Reserve said they would enhance dollar swap lines, helping calm investors rattled by turmoil in the banking sector. “To improve the swap lines’ effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of seven-day maturity operations from weekly to daily,” the Fed said in a statement issued alongside announcements from the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank. S&P 500 futures rose 0.2% in bumpy early trade in Asia. The safe-haven yen was steady.