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Monday, March 27, 2023

How did it impact other assets?

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Global markets are rocking again after a day of calm after Credit Suisse Group fell as much as 60% in one day and hit European banks squarely, four of which had to go public to avoid prolonging losses.

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Risky assets were greatly affected by the fall of the Swiss bank, which led to a liquidation of financial companies around the world, which affected banks such as JPMorgan Chase, Wells Fargo. and Citigroup, which lost 3.25%, 3.13% and 4.73% respectively.

Nearly 90% of the shares that make up the S&P 500 they fell when the benchmark European equity index was hit with a drop of close to 3%. The index falls 1.8% at the opening of the trading session.

Oil for its part also imitates the trend. The crude Brent it falls below 75 dollars a barrel for the first time since the end of 2021 and loses more than 3% in one day.

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He West Texas Intermediate (WTI) American drilled 70 dollars a barrel and is trading at 68.70 dollars after losing 3.62% in one day. The WTI had not touched this value since December 2021.

Investors sought support from safer sources and turned to the goldthat rises 0.9% to $1,928 an ounce. The dollar for its part also recovers and rises 1.21% to 104,455 units.

The performance of the US treasury bonds falls on Wednesday after data showed signs of economic weakness and a cooling of inflation in the country. The return of the reference notes to 10 years went down 15.1 basis points, at 3.485%and the 30-year paper fell 10.6 basis points, to 3.655%.

A closely watched part of the yield curve, which measures the spread between the return of two and 10 year bonds and is considered an indicator of economic expectations, fell to -45.2 basis points. The yield on two-year debt, which tends to move in step with interest rate expectations, fell 29 basis points to 3.935%.

Aside from the banking turmoil, traders also reacted to an unexpected fall in producer prices, which fueled bets that the Federal Reserve will not pick up its pace of rate hikes for now. The executive president of BlackRock, Larry Fink, said that the banking crisis could get worse beyond the failure of Silicon Valley Bank, and expressed concern about the cracks in the financial system that formed over a decade of easy money and low interest rates.

Cryptocurrencies also extend their fall on Wednesday and lose more than 7%.

Source: Ambito

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