Sydney: Asian market A risk rally extended on Wall Street on Friday to end a tumultuous week in which a looming banking crisis saw bond yields slide while market participants raised expectations of future interest rate hikes in Western economies. reduced rapidly.
Overnight, the European Central Bank (ECB) hiked inflation-fighting measures by 50 basis points in line with repeated guidance, with massive support for Credit Suisse Group AG by the Swiss national bank, which raised concerns about the troubled lender. 20 shipped the shares. % More.
11 US banks, including JPMorgan Chase & Co, will deposit up to $30 billion in First Republic Bank. Investors welcomed the move, sending the stricken lender’s stock 10% higher.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9% on Friday, erasing losses from earlier this week. Japan’s Nikkei rose 0.5%.
China’s bluechips rose 0.8% and Hong Kong’s Hang Seng index rose 1.2%.
S&P 500 futures were up 0.1% and Nasdaq futures were flat after major US stock indices rose as fears of a global banking crisis eased.
Meanwhile, global central bankers on Thursday presented what market watchers described as an emerging effort to firewall needed rate hikes to fight inflation from separate efforts to calm concerns about financial stability. Explained.
James Rossiter, Head of Global Macro Strategy at TD Securities, said: “The ECB is trying to draw a clear line between its fight against inflation and its work to maintain financial stability.
“It is rare that financial turmoil emerges in such a high-inflation environment, and when tighter financial conditions come at a convenient time for inflation-fighting central banks, they are unlikely to believe that. Tighter fiscal conditions alone would be enough to bring inflation back to the target.”
As indicated in the post-hiking note, the ECB refrained from providing further guidance on future rate hikes. Euribor futures have risen fully a quarter point to 3.25% on the ECB’s next policy meeting and the prospect of another.
Markets are also heavily pricing in a 25 basis point hike from the US Federal Reserve at next week’s meeting, though there is a 20% chance the Fed will hold instead.
The two-year Treasury yield continued to climb on Friday, rising 8 basis points to 4.2137% and pulling away from a six-month low of 3.7200% earlier this week. However, yields were on course for their sharpest weekly decline since February 2020, when markets were thrown into chaos by Covid-19 fears.
The ten-year yield was steady at 3.5789% on Friday and was set for a weekly decline of 11 basis points.
The US dollar and the Japanese yen reversed some of their safe-harbor flows. The dollar index hovered at 104.38 after falling 0.3% overnight, while the yen pulled back from a one-month high at 133.47 per dollar.
The euro held steady at $1.0615 after being boosted by the ECB’s overnight half-point hike.
“The past week has provided an unwelcome reminder of the banking system’s inherent fragility,” analysts at Capital Economics said in a note to clients.
“There is still a great deal of uncertainty. The key question is whether this episode proves another relatively brief period of volatility that soon dies down, or the first blow of a major banking crisis. At this stage, the answer is unknown.”
Underscoring the scale of stress in the financial system, the data showed banks sought a record amount of emergency liquidity from the Federal Reserve in recent days, breaking prior records during the global financial crisis.
Oil prices slipped on Friday but were heading for a 10% decline for the week. US crude declined 0.3% to $68.15 a barrel, while Brent crude also declined 0.3% to $74.5 a barrel.
Gold was a bit high. Spot gold was trading at $1920.69 an ounce, heading for a weekly gain of 2.8%.
Overnight, the European Central Bank (ECB) hiked inflation-fighting measures by 50 basis points in line with repeated guidance, with massive support for Credit Suisse Group AG by the Swiss national bank, which raised concerns about the troubled lender. 20 shipped the shares. % More.
11 US banks, including JPMorgan Chase & Co, will deposit up to $30 billion in First Republic Bank. Investors welcomed the move, sending the stricken lender’s stock 10% higher.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9% on Friday, erasing losses from earlier this week. Japan’s Nikkei rose 0.5%.
China’s bluechips rose 0.8% and Hong Kong’s Hang Seng index rose 1.2%.
S&P 500 futures were up 0.1% and Nasdaq futures were flat after major US stock indices rose as fears of a global banking crisis eased.
Meanwhile, global central bankers on Thursday presented what market watchers described as an emerging effort to firewall needed rate hikes to fight inflation from separate efforts to calm concerns about financial stability. Explained.
James Rossiter, Head of Global Macro Strategy at TD Securities, said: “The ECB is trying to draw a clear line between its fight against inflation and its work to maintain financial stability.
“It is rare that financial turmoil emerges in such a high-inflation environment, and when tighter financial conditions come at a convenient time for inflation-fighting central banks, they are unlikely to believe that. Tighter fiscal conditions alone would be enough to bring inflation back to the target.”
As indicated in the post-hiking note, the ECB refrained from providing further guidance on future rate hikes. Euribor futures have risen fully a quarter point to 3.25% on the ECB’s next policy meeting and the prospect of another.
Markets are also heavily pricing in a 25 basis point hike from the US Federal Reserve at next week’s meeting, though there is a 20% chance the Fed will hold instead.
The two-year Treasury yield continued to climb on Friday, rising 8 basis points to 4.2137% and pulling away from a six-month low of 3.7200% earlier this week. However, yields were on course for their sharpest weekly decline since February 2020, when markets were thrown into chaos by Covid-19 fears.
The ten-year yield was steady at 3.5789% on Friday and was set for a weekly decline of 11 basis points.
The US dollar and the Japanese yen reversed some of their safe-harbor flows. The dollar index hovered at 104.38 after falling 0.3% overnight, while the yen pulled back from a one-month high at 133.47 per dollar.
The euro held steady at $1.0615 after being boosted by the ECB’s overnight half-point hike.
“The past week has provided an unwelcome reminder of the banking system’s inherent fragility,” analysts at Capital Economics said in a note to clients.
“There is still a great deal of uncertainty. The key question is whether this episode proves another relatively brief period of volatility that soon dies down, or the first blow of a major banking crisis. At this stage, the answer is unknown.”
Underscoring the scale of stress in the financial system, the data showed banks sought a record amount of emergency liquidity from the Federal Reserve in recent days, breaking prior records during the global financial crisis.
Oil prices slipped on Friday but were heading for a 10% decline for the week. US crude declined 0.3% to $68.15 a barrel, while Brent crude also declined 0.3% to $74.5 a barrel.
Gold was a bit high. Spot gold was trading at $1920.69 an ounce, heading for a weekly gain of 2.8%.
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