Morning wrap (14.03.2023)

• US indices finished yesterday's trading lower, following a volatile session. S&P 500 dropped 0.15%, Dow Jones moved 0.28% lower and Russell 2000 slumped 1.60%. Nasdaq was outperformer and gained 0.45%

• Some relief can be spotted on the bond markets with US 2-year yield climbing 15 basis points today, following an over-100 basis point slump yesterday. 2-year US yield sits around 4.17-4.18% today

• Indices from Asia-Pacific traded lower today. Nikkei plunged 2.2%, S&P/ASX 200 moved 1.4% lower, Kospi slumped 2.5% and Nifty 50 traded 0.6% down. Indices from China traded 0.4-2.2% lower

• DAX futures point to a flat opening of the European cash session

• Fed Chair Powell said that thorough, transparent and swift review of SVB failure is needed. Results of the review will be published at the beginning of May

• Canadian regulator will boost monitoring and begin daily check-ins with domestic banks in an attempt to prevent SVB-like banking collapse in Canada

• Suzuki, finance minister of Japan, said that he does not expect significant financial impact from SVB collapse on Japanese financial system

• US National Security Adviser Sullivan said that the Biden-Xi phone call will take place after the Chinese National Party Congress ends. No comment on topics to be discussed was offered

• Nomura expects Fed to deliver a 25 bp rate cut and QT pause announcement at next week's FOMC meeting. BlackRock does not expect FOMC to halt rate hike cycle as response to SVB was swift, decisive and situation is not repeat of 2008

• According to Global Times report, Chinese authorities are considering increasing retirement age as the country is beginning to struggle with rapidly aging population

• South China Morning Post reports that Russia has agreed to 60-day extension to Russia-Ukraine grain deal

• Australian household spending dropped 01.% MoM in February

• Cryptocurrencies are trading relatively little changed following yesterday's rally. Bitcoin gains 1%, Ethereum drops 0.2% and Dogecoin traded 0.7% lower

• Oil is trading 0.8-0.9% lower this morning while gold drops 0.1%

• NZD and CAD are the best performing major currencies while JPY and EUR lag the most

Russell 2000 (US2000) was the worst performing major Wall Street index yesterday, dropping over 1.5%. As fallout from SVB collapse is likely to be limited to smaller banks, small-cap index is taking a much bigger hit than S&P 500 or Dow Jones. Source: xStation5