Global Markets:
- Asian Stock Markets : Nikkei down 1.42%, Shanghai Composite down 0.48%, Hang Seng down 3.25%, ASX down 1.38%
- Commodities : Gold at $1992.50 (+0.96%), Silver at $22.57 (+0.47%), Brent Oil at $70.95 (-2.77%), WTI Oil at $65.14 (-2.67%)
- Rates : US 10-year yield at 3.325, UK 10-year yield at 3.301, Germany 10-year yield at 2.145
News & Data:
- (USD) Prelim UoM Inflation Expectations 3.80% vs 4.10% previous
- (USD) Prelim UoM Consumer Sentiment 63.4 vs 66.9 expected
Markets Update:
Asian markets fell on Monday despite a weekend rescue deal for Credit Suisse and a coordinated effort by central banks to ease liquidity strains in the global banking system. Investors remained wary of the potential fallout from the collapse of Silicon Valley Bank, which has triggered a confidence crisis in the financial sector.
The Hang Seng index led losses in the region, dropping 3% as consumer cyclical stocks weighed on the benchmark. The Hang Seng Tech index also declined 2.8%. In mainland China, the Shanghai Composite traded lower by 0.5%. China left its one-year and five-year loan prime rate unchanged at 3.65% and 4.3% respectively. In Japan, bank shares rebounded 1% after being battered last week, but the Nikkei 225 still fell 1.4%. The Topix was down 0.9%. In Australia, financials slid 1.2 % and dragged down the S&P/ASX 200 by 1.4%. South Korea’s Kospi was down 0.4%, while the Kosdaq rose 0.5%.
Over the weekend, UBS said it will buy Credit Suisse for $3.2 billion and assume up to $5.4 billion in losses, in a deal brokered by Swiss authorities to prevent a systemic meltdown. Central banks including the Fed, the ECB and the BOJ pledged to increase their support for liquidity by offering more frequent dollar-swap operations.
However, these moves did not fully assuage market fears of contagion risk as some major banks in Europe are examining worst-case scenarios and looking for stronger signals of support from regulators. Concerns also remain elevated about regional banks in the US that have exposure to Silicon Valley Bank or its clients.
In other markets, crude oil prices fell as demand worries outweighed supply disruptions caused by an attack on Saudi Arabia’s oil facilities over the weekend. Gold prices rose as investors sought safe-haven assets amid market jitters. The US dollar index weakened as expectations of rate hikes later this year faded amid easing liquidity conditions. The index was down 0.4% at 91.56 against a basket of major currencies.
Upcoming Events:
Tuesday, March 21, 2023
- 12:30 AM GMT – (AUD) Monetary Policy Meeting Minutes
- 10:00 AM GMT – (EUR) German ZEW Economic Sentiment
- 12:30 PM GMT – (CAD) CPI m/m
- 12:30 PM GMT – (CAD) Median CPI y/y
- 12:30 PM GMT – (CAD) Trimmed CPI y/y
- 12:30 PM GMT – (CAD) Common CPI y/y
- 12:30 PM GMT – (EUR) ECB President Lagarde Speaks
- 02:00 PM GMT – (USD) Existing Home Sales
Wednesday, March 22, 2023
- 07:00 AM GMT – (GBP) CPI y/y
- 08:45 AM GMT – (EUR) ECB President Lagarde Speaks
- 06:00 PM GMT – (USD) FOMC Economic Projections
- 06:00 PM GMT – (USD) FOMC Statement
- 06:00 PM GMT – (USD) Federal Funds Rate
- 06:30 PM GMT – (USD) FOMC Press Conference
Thursday, March 23, 2023
- 08:30 AM GMT – (CHF) SNB Monetary Policy Assessment
- 08:30 AM GMT – (CHF) SNB Policy Rate
- Tentative – (CHF) SNB Press Conference
- 12:00 PM GMT – (GBP) MPC Official Bank Rate Votes
- 12:00 PM GMT – (GBP) Monetary Policy Summary
- 12:00 PM GMT – (GBP) Official Bank Rate
- 12:30 PM GMT – (USD) Unemployment Claims
- 02:00 PM GMT – (USD) New Home Sales
- 11:30 PM GMT – (JPY) National Core CPI y/y
Friday, March 24, 2023
- 07:00 AM GMT – (GBP) Retail Sales m/m
- 08:15 AM GMT – (EUR) French Flash Services PMI
- 08:15 AM GMT – (EUR) French Flash Manufacturing PMI
- 08:30 AM GMT – (EUR) German Flash Manufacturing PMI
- 08:30 AM GMT – (EUR) German Flash Services PMI
- 09:00 AM GMT – (EUR) Flash Manufacturing PMI
- 09:00 AM GMT – (EUR) Flash Services PMI
- 09:30 AM GMT – (GBP) Flash Manufacturing PMI
- 09:30 AM GMT – (GBP) Flash Services PMI
- 12:30 PM GMT – (CAD) Core Retail Sales m/m
- 12:30 PM GMT – (CAD) Retail Sales m/m
- 12:30 PM GMT – (USD) Core Durable Goods Orders m/m
- 12:30 PM GMT – (USD) Durable Goods Orders m/m
- 01:45 PM GMT – (USD) Flash Manufacturing PMI
- 01:45 PM GMT – (USD) Flash Services PMI
