GBP/USD continuation traders are in the market as renewed unease gripped world markets on Wednesday on the news that Credit Suisse's largest investor said it could not provide the Swiss bank with more financial assistance, prompting the Swiss bank's CEO to make new assurances on its financial strength.

Credit Suisse has been battling to recover from a string of scandals that have undermined the confidence of investors and clients and the institution´s plunging stock price has re-ignited jitters among investors about the resilience of the global banking system following the collapse of Silicon Valley Bank last week. Credit Suisse CEO Ulrich Koerner moved to calm nerves, saying the bank's liquidity base remained strong and was well above all regulatory requirements.

However, investors are worried that a full-blown global banking crisis may be brewing with some analysts saying that Credit Suisse is the tip of the iceberg. Bob Michele, JPMorgan Asset Management CIO and global head of fixed income, says Credit Suisse shows the lagged impact of central bank tightening have caught up during an interview with Jonathan Ferro on "Bloomberg The Open," saying that this is the tip of the iceberg with a lot more consolidation and pain to come, ´´so you put your money into the highest quality assets that you can find´´. He also says that the Federal Reserve should pause. 

In this regard, concerns about the Swiss bank triggered a sharp decline in European and US bond yields as investors questioned if the Federal Reserve and other central banks can keep hiking interest rates to curb inflation. Two-year Treasury notes, which move in step with interest rate expectations, have tumbled 98 basis points in the last five days, the biggest drop since the week of Black Monday on Oct. 19, 1987. On Wednesday, they have fallen from 4.413% to pay as low as 3.72%. As recently as last week, markets braced for the return of large Fed interest rate rises but markets are now pricing in an 80% chance of a 25 basis point Federal Reserve hike next week and are pricing in a 50% chance of no change. Moreover, the December Fed funds futures, which reflect the overnight rate that banks use to lend to each other has dropped to 3.62% in a sign market expects the Fed to be cutting interest rates by year's end, if not before