U.S. existing home sales improved from 4.00 million in January to 4.58 million in February, chalking up the strongest monthly rebound since COVID-19 lockdowns and ending its 12-month losing streak
Banking sector woes were still the main theme early in the week before the spotlight shifted to the FOMC decision later on, along with other major central banks’ statements.
Switzerland’s trade surplus narrowed down from 2.9B CHF to 2.5B CHF in February as exports fell by 1.1% while imports rose by 1.3% for the month.
That was taken as a signal by traders of little faith that the banking sector’s issues are not over yet despite reassurances of stability from government and banking officials this week. Risk assets broadly fell throughout the morning London session before calming down ahead of the U.S. session open. This was likely a response to comments from European Central Bank President Christine Lagarde and German Chancellor Olaf Scholz that the euro area banking sector is strong.
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Global risk-off flows returned on Friday, once again focusing the banking sector as Deutrsche Bank and UBS shares sunk in price. This was likely catalyzed by the sudden spike higher in Deutsche Bank’s five-year credit default swaps (CDS) on Thursday, then once again on Friday.
We also got news that there was a coordinated effort by major central banks (Fed, BOC, BOE, ECB, BOJ, and SNB) to shore up liquidity by increasing the frequency of U.S. dollar swap operations. It’s tough to say but this may have been a calming factor, possibly contributing to bottoming out of the negative risk-off move in Asia on Monday.
BOJ Summary of Opinions for March Meeting: “must maintain its massive stimulus to support the economy and ensure Japan would sustainably achieve the central bank’s 2% inflation target
Canadian median CPI dipped from 5.0% to 4.9% year-over-year vs. 4.8% estimate in February, as grocery prices remained elevated due to supply constraints and bad weather conditions
Japanese national core CPI fell from 4.1% to 3.3% year-over-year in February, headline rate fell from 4.3% to 3.3% vs. projected 4.1% reading
RBA monetary policy meeting minutes sounded less hawkish, as central bank officials acknowledged that inflation remains too high but that warding off price pressures has been complicated
JPMorgan analysts estimate that some $1 trillion worth of deposits have already left the most vulnerable banks, following the collapse of SVB and Signature Bank two weeks ago
While gold rounded up another day in the red, copper prices refused to back down and instead rallied for the fourth consecutive session to trade around $4 on signs of stronger demand from China.
The Federal Open Market Committee hiked the benchmark interest rate by 0.25% on Wednesday to a new range of 4.75% and 5.00%; sees greater uncertainty ahead due to stress in the banking system
Risk assets were able to extend their gains the following day, as Treasury Secretary Yellen mentioned that uninsured deposits might be covered if smaller lenders start showing signs of a deposit run as well.
Australia’s MI leading index posted another 0.1% m/m dip in February, chalking up its seventh consecutive negative reading
The Bank of Canada’s Summary of Deliberations showed that members were concerned that inflation will be hold above the 2% target and see a potential further need to tighten monetary policy.
As widely expected, the FOMC hiked interest rates by 0.25% during their announcement, with Powell warning that tighter credit conditions might be observed for households and businesses in the meantime.
Eurozone ZEW economic sentiment index slipped from 29.7 to 10.0 vs. 16.0 forecast in March