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Friday 17th March 2023:Asian Markets rebound as global bank crisis fears ease

Global Markets:

  • Asian Stock Markets : Nikkei up 1.20%, Shanghai Composite up 0.73%, Hang Seng up 1.64%, ASX up 0.42%
  • Commodities : Gold at $1935.10 (+0.63%), Silver at $21.99 (+1.38%), Brent Oil at $75.28 (+0.78%), WTI Oil at $69.00 (+0.95%)
  • Rates : US 10-year yield at 3.543, UK 10-year yield at 3.407, Germany 10-year yield at 2.258

News & Data:

  • (USD) Unemployment Claims 192K vs 205K expected
  • (USD) Philly Fed Manufacturing Index -23.2 vs -14.7 expected
  • (EUR) Main Refinancing Rate 3.50% vs 3.50% expected

Markets Update:

Asian stock markets rose on Friday, following gains on Wall Street after major US banks unveiled a $30 billion lifeline for troubled regional lender First Republic Bank. The move eased fears of a global banking crisis that had rattled investors since last week’s collapse of Silicon Valley Bank (SVB), which triggered a wave of withdrawals and losses among other banks.

The MSCI Asia Pacific index excluding Japan climbed 0.9 percent, reversing earlier losses, while Japan’s Nikkei 225 rose by 0.5 percent. China’s blue-chip index gained 0.8 percent, while Hong Kong’s Hang Seng jumped 1.2 percent.

Asian bank shares also joined the gains, with Japanese banks including Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group rising by as much as 2 percent. The MSCI Asia Pacific Financials index climbed as much as 0.4 percent after earlier losses.

The Federal Reserve said it had lent nearly $12 billion to banks since Sunday via a new specific program intended to honor the withdrawal requests of their customers. The institution also lent $142.8 billion to the two entities created by regulators to succeed SVB and Signature Bank.

In Europe, the European Central Bank (ECB) raised its main interest rate by half a point and said it was ready to intervene if necessary to preserve financial stability in the euro zone. The ECB also announced support measures for Credit Suisse, which had suffered heavy losses from its exposure to SVB and other troubled banks.

In other markets, crude oil prices edged higher on Friday as supply disruptions in Libya and Iraq offset concerns about demand amid rising COVID-19 cases globally. Brent crude futures rose 0.4 percent to $75.32 a barrel, while US West Texas Intermediate (WTI) crude futures gained 0.3 percent to $72.18 a barrel.

Gold prices slipped on Friday as investors booked profits after a rally driven by safe-haven demand amid the banking turmoil and inflation worries. Spot gold fell 0.2 percent to $1,823.86 per ounce, while US gold futures eased 0.1 percent to $1,826 per ounce.

The US dollar index, which measures the greenback against a basket of six major currencies, was little changed at 96.15 on Friday after hitting a one-year high of 96.60 on Thursday amid expectations of faster monetary policy tightening by the Fed compared with other central banks.

Upcoming Events:

  • 02:00 PM GMT – (USD) Prelim UoM Consumer Sentiment
  • 02:00 PM GMT – (USD) Prelim UoM Inflation Expectations

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