Daily summary: Banking concerns just won't go away

6:59 PM 17 March 2023
  • Markets remained nervous on the final trading day of the week with major European and US indices pulling back

  • Top blue chips indices from Europe dropped over 1% lower while major Wall Street indices, like S&P 500 and Nasdaq, are trading around 1.0-1.5% lower on the day

  • Flight to safety can be spotted on the markets with money flowing to precious metals and bonds

  • Gold is trading over 3%  higher on the day as short- and long-term US yields plunge with psychological $2,000 level being just 1% away

  • Markets are pricing around 60% chance of Fed hiking rates by 25 basis points next week and around 40% of keeping them unchanged

  • USD is one of the worst performing G10 currencies today

  • In spite of yesterday's liquidity boost from major central banks, share price of First Republic Bank saw only short-lived relief and is plunging 25% today

  • Credit Suisse remains in the center of attention in Europe with bank calling its CFO teams to work over the week and look for 'scenarios for the bank'

  • Also, media reports saying that major banks are limiting trading with Credit Suisse are mounting. Deutsche Bank and Societe Generale are said to be the latest to restrict trading with CS

  • Energy commodities are pulling back amid an overall increase in risk aversion. Brent and WTI are trading 2% lower and is heading for the biggest weekly drop since April 2022 while US natural gas prices plunge 7%

  • Downward pressure on US natural gas prices is further magnified by new weather forecast for the United States that hint at near- or above-average temperatures in key heating regions over the next 2 weeks

  • University of Michigan consumer sentiment for March missed expectations significantly, dropping from 67.0 to 63.4 (exp. 67.0). Both current situation and expectations subindices missed estimates significantly

  • In spite of risk-off moods seen across most financial markets, cryptocurrencies are having a great day. Bitcoin jumps 6% and trades in the $26,500 area

Nasdaq-100 (US100) failed to sustain bullish momentum and break above the 12,750 pts resistance zone. The index is pulling back today as concerns over the condition of the US and European continue to linger over markets. However, Nasdaq-100 drops the least among major Wall Street indices due to an almost non-existent share of the banking sector in the index. Source: xStation5

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