Posted at 13 March 2023 / Categories Market Roundups
Market Roundup
•Markets sharply reprice Fed rate hike outlook
•Dow down 0.28%, S&P 500 down 0.15%, Nasdaq up 0.45%
•Focus turns to U.S. consumer price index on Tuesday
•US Participation Rate Feb 62.5%,62.4% previous
•US CB Feb Employment Trends Index 118.29, 118.74 previous
•French 3-Month BTF Auction 2.665%, 2.825% previous
•French 6-Month BTF Auction 2.819% , 3.022% previous
•French 12-Month BTF Auction 2.891% ,3.358% previous
•US Consumer Inflation Expectations 4.2% ,5.0% previous
Looking Ahead Economic Data (GMT)
•00:30 Australia Feb NAB Business Survey 21 forecast, 18 previous
•00:30 Australia Feb NAB Business Confidence 0 forecast,6 previous
Looking Ahead Events And Other Releases (GMT)
No events ahead
Currency Summaries
EUR/USD: The euro strengthened against the dollar on Monday as greenback fell on expectations that Fed will slow down the pace of its interest rate hikes after fallout from the collapse of Silicon Valley Bank (SVB) failed to ease fears. The market turmoil from the SVB collapse led investors to speculate the Fed will no longer raise interest rates by a super-sized 50 basis points this month. After the SVB collapse, traders now expect the Fed to no longer raise interest rates by 50 basis points this month, in contrast to a 70% probability before the event. The focus will now be on Tuesday's inflation data to gauge how hawkish the Fed is likely to be. Immediate resistance can be seen at 1.0738 (Daily high), an upside break can trigger rise towards 1.0781(23.6%fib).On the downside, immediate support is seen at 1.0665 (38.2%fib), a break below could take the pair towards 1.0609(5DMA).
GBP/USD: Sterling rose against a weakening dollar on Monday after the sudden collapse of U.S. tech-focused lender Silicon Valley Bank (SVB) raised expectations that the Federal Reserve will slow down the pace of its interest rate hikes. The biggest bank collapse since the 2008 financial crisis roiled markets and weakened the U.S. dollar against major peers as investors price in the possibility that the Fed will take a less aggressive monetary policy tightening path.The U.S. government announced several emergency measures to shore up confidence in the banking system. Sterling traded at $1.2181, up 1.27% on the day. Immediate resistance can be seen at 1.2165 (23.6%fib), an upside break can trigger rise towards 1.2221(Higher BB).On the downside, immediate support is seen at 1.1981(38.2%fib), a break below could take the pair towards 1.1931(5DMA).
USD/CAD: The Canadian dollar strengthened against the greenback on Monday as concerns over fallout from the collapse of Silicon Valley Bank lingered despite action from regulators. Traders no longer expect a rate hike of 50 basis points by the Federal Reserve next week and the current projection is for a 25-basis-point move, with some even expecting no hike at all. The loonie was trading 0.7% higher at C$1.3728 to the greenback, or 72.84 U.S. cents, after trading in a range of 1.3678 to 1.3825. Immediate resistance can be seen at 1.3789 (5DMA), an upside break can trigger rise towards 1.3818 (23.6%fib).On the downside, immediate support is seen at 1.3684 (38.2%fib), a break below could take the pair towards 1.3677 (Daily low).
USD/JPY: The dollar initially dipped against yen on Monday on SVB contagion fears but recovered some ground after U.S. authorities moved to limit the fallout from the sudden collapse of Silicon Valley Bank. President Joe Biden said the administration's swift actions to ensure depositors can access their funds in Silicon Valley Bank and Signature Bank should give Americans confidence that the U.S. banking system was safe. Safe-haven currencies, such as the Japanese yen and Swiss franc, benefited from the fallout from SVB.The Japanese yen strengthened 1.26% at 133.33 per dollar. Strong resistance can be seen at 133.56(50%fib), an upside break can trigger rise towards 134.00(Psychological level).On the downside, immediate support is seen at 132.16(Daily low), a break below could take the pair towards 131.51(38.2%fib).
Equities Recap
European stocks logged their steepest one-day fall this year on Monday on continued drag from banking stocks even as authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank.
UK's benchmark FTSE 100 closed down by 2.58 percent, Germany's Dax ended down by 3.04 percent, France’s CAC finished the day down by 2.90 percent.
Sliding bank shares dragged Wall Street down on Monday with investors worried about contagion from the Silicon Valley Bank collapse, but trade was choppy and the Nasdaq composite actually ended higher as some sectors benefited from hopes the Federal Reserve could ease up on interest rates hikes.
Dow Jones closed down by 0.28% percent, S&P 500 closed down by 0.15% percent, Nasdaq settled up by 0.45% percent.
Commodities Recap
Gold prices surged on Monday, as their safe-haven appeal drew in investors spooked by the collapse of Silicon Valley Bank, with the crisis also sparking hopes the U.S. Federal Reserve would have to slam the brakes on its aggressive monetary policy.
Spot gold jumped 2.4% to $1,921.06 per ounce by 1:34 p.m. EDT (1734 GMT), the highest since early February. U.S. gold futures gained 2.6% to settle at $1,916.50.
Oil prices fell over 2% in volatile trading on Monday as the collapse of Silicon Valley Bank roiled equities markets and raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support.
Brent crude futures settled down $2.01, or 2.4%, to $80.77. The global benchmark earlier fell to a session low of $78.34, its lowest price since early January.
U.S. West Texas Intermediate crude futures (WTI) dropped $1.88, or 2.5%, to $74.80 a barrel.