Daily Updates

It was quite an optimistic night in the global financial markets, with US and European stocks seeing decent gains, supported by positive earnings outlooks from US companies.

Global equities gave up some of their recent gains overnight, while government bond yields continued to climb, particularly for shorter maturities as fed funds rate expectations saw another slight increase.

Global stocks rose further overnight, supported by the news of the takeover of Silicon Valley Bank deposits and loans, and an easing of concerns about Deutsche Bank.

US stocks managed to gain on Friday, but this followed declines in Europe amid fresh contagion fears due to concerns over the health of Deutsche Bank, another global systemically important financial institution. Fresh flight-to-safety flows led to a further decline in government bond yields.

Despite a late whipsaw, US stocks gained overnight supported by strong gains in the tech sector, while other sectors saw no change or declines. Central banks in Europe followed the Fed’s lead from Thursday morning, increasing their policy rates further, as expected.

US equities were steady through most of the overnight session before slumping in the afternoon, led by big falls in bank shares, particularly regionals. Treasury yields also tumbled, reversing all the previous day’s gains and more. The US dollar slipped as the Fed signalled the rate hiking cycle is near an end.

Global stocks saw further increases overnight, as concerns over the condition of the global banking sector continued to ease.

Global stocks bounced overnight, as the takeover of Credit Suisse by UBS over the weekend reduced contagion fears about the global banking sector.

Wall Street finished a tumultuous week lower on Friday, amid fresh contagion fears over the US and global banking sectors.

US stocks saw significant increases overnight, as the largest US lenders provided support to First Republic Bank which has been impacted by the crisis in confidence in US regional banks.

US shares fell again, following a plunge in Europe in reaction to troubles with banking giant Credit Suisse. Government bond yields were in a renewed freefall, with markets increasingly expecting there to be no change in the fed funds rate at the FOMC meeting next week. The Aussie dollar depreciated against all the major currencies but the weaker euro.

US equities rose overnight as regional bank stocks stabilised, while government bond yields bounced as the US CPI figures showed that the Fed’s fight with inflation is far from over. The US dollar continued to weaken, however, and the Aussie dollar gained against all the major currencies.

Despite the measures taken by the US authorities to limit the risks from the collapse of the Silicon Valley Bank and Signature Bank, risk aversion continued to grow on Monday.

A collapse of the Silicon Valley Bank, with US$209 billion in assets, is the second-largest bank failure in US history and led to a spike in risk aversion on Friday. The US stock market saw a broad-based decline, led by real estate amid contagion fears, while US Treasury yields dropped sharply across the yield curve on flight-to-safety flows.

US stocks saw sharp declines overnight, while Treasury yields dropped, especially for shorter maturities, as the weak initial jobless claims report increased uncertainty regarding the non-farm payrolls release scheduled for tonight. The markets are now pricing in around a 50% chance of a 50bps hike at the FOMC meeting on 21-22 March, down from over 70% on Wednesday night.

US equities were mixed overnight with the Dow Jones seeing another slight decline, while the S&P 500 and Nasdaq closed somewhat higher. US 2-year Treasuries climbed again, albeit less decisively than the previous night, and the US dollar stabilised. The AUD has depreciated against all the major currencies but the euro.

As expected, the RBA increased the cash rate target by 25bps to 3.60%, but unexpectedly issued a relatively dovish post-meeting statement by the RBA Governor when compared to the hawkish tone of the February statement.