GBP/USD silence at 1.2070 level, as the market awaits more clarity on the Credit Suisse front

• BoE is in emergency talks upon the Credit Suisse crisis.
• Liquidity squeeze and falling yields are dialing back aggressive tightening across the globe.
• US PPI eased the price pressure while Retail Sales showed muted activity. 

GBP/USD is in a consolidative phase in early Asian trading hours on Thursday amid reports suggesting that the Bank of England (BoE) is in emergency talks as the Credit Suisse crisis worsens following the Swiss National Bank's (SNB) intervention.

Many headlines are picking up on the Credit Suisse front on Thursday amid liquidity issues. Adding to this, the Bank of England was holding emergency talks with international counterparts on bolstering liquidity in the event of a worsening situation. The chain reaction began with Silicon Valley Bank's (SVB) fallout, where the UK division was rescued by HSBC bank, while in the case of Credit Suisse, both BoE and SNB are in hot haste.

Moving on to the US Dollar, a squeeze in liquidity amid banking and financial sectors is dampening the US Dollar demand as US Treasury bond yields have started to fall. Given the liquidity issues from SVB and Credit Suisse, investors are trimming the chances of aggressive monetary tightening across the globe.

The market outlook for the Federal Reserve (Fed) rate hike for the March FOMC meeting has softened due to back-to-back liquidity issues arising from higher borrowing costs.

Meanwhile, the US Producer Price Index (PPI) released on Wednesday came in below expectations and eased some price pressure from producers, while US Retail Sales signaled a slowdown in retail activity.

In the absence of any top-tier data from the UK, GBP/USD is likely to take cues from the US data including the Building Permits, Housing Starts, Initial Jobless Claims, and the Philadelphia Fed Manufacturing Survey amid volatile risk sentiments.

Levels to watch