It is not only the Fed this time but also the US Banks and more precisely the SVB Financial Group SIVB which drifted by -60.41% yesterday. Shares of SVB, the parent of Silicon Valley Bank, disclosed the loss and sought to raise $2.25 billion in fresh capital by selling new shares. The 4 biggest US banks lost $47 bln in Market Value! (BoA, Citi, JP Morgan, Wells Fargo). Jobless Claims unexpectedly ticked up. Germany February final CPI remains sticky at +8.7% vs +8.7% y/y prelim. UK January monthly GDP +0.3% vs +0.1% m/m expected.
Overnight: BoJ left policy unchanged, as universally anticipated, in Governor Kuroda’s final meeting. The policy rate was left steady at -0.1%, along with a 0.5% cap on the 10-year JGB yield (YCC).The vote was a unanimous 9-0. JGB & Nikkei (-1.67%) sinks overnight, the Kuroda swansong maintains Yield Curve Control with no tweaks and outlook remains as Dovish as ever. China’s Xi Jinping takes third term as President with eye on US.
- USDIndex gapped down to 104.62 low.
- VIX climbed 18%, the biggest jump since June, to 22.42.
- Euro jumped to 1.0590, Sterling up at 1.1950. Yen jumped to 136.96 from 135.80. USDCAD at 1.3850 high.
- Treasury yields plunged Thursday, first richening on the cooling in weekly jobless claims, then extending lower as Wall Street slumped sharply. Technical buying also supported the rally in Treasuries.
- Stocks – US100 dove by -2.05%. The US500 -1.85%. The US30 dropped -1.66%. Russell slid -3%, Topix Banks -5.83%. PacWest Bancorp fell 25%, and First Republic Bank lost 17%. Charles Schwab Corp. fell 13%, while US Bancorp lost 7%. America’s biggest bank, JPMorgan Chase & Co., fell 5.4%. Twitter and Elon Musk face legal risks in FTC Probe. Tesla (-4.99%).
- USOil – dips to $74.93.
- Gold – rebounds to $1834.79 but looks to be capped around here by the hawkish Fed outlook.
- Cryptocurrencies – BTC – below $20K, filled January’s gap! Next supports at 2022 bottom!
Today – NFP and Canadian Labor data!
Biggest FX Mover @ (07:30 GMT) VIX(+18%). Spiked to 22.42. MAs are now flat, MACD histogram & signal line remain well above 0, RSI 79 but flat, Stochastics falling, H1 ATR 0.36, Daily ATR 1.24.
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Andria Pichidi
Market Analyst
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