Equities advance as banking crisis fears recede - 28.3.2023

The Dollar weakening continues currently. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.2% on Monday.

GBP/USD and EUR/USD reversed their sliding on Monday as German business sentiment reflected in Ifo index inproved for the sixth month in a row in March. Both Pound and euro are higher against the dollar currently. Both USD/JPY and AUD/USD reversed their retreating yesterday with both the yen and Australian dollar higher against the Greenback currently.

Futures on three main US stock indexes are up currently with the yield on benchmark 10-year Treasury notes down at 3.515%. US stocks closed mixed on Monday, with three main stock benchmarks recording daily returns in the range from -0.47% to 0.6% after news First Citizens Bank agreed to buy approximately $72 billion of Silicon Valley Bank at a discount of $16.5 billion, but around $90 billion in securities and other assets of SVB will remain “in receivership for disposition by the FDIC.”

European stock indexes futures are higher currently after closing up Monday with auto and health care shares leading gains as Deutsche Bank rebounded 6.5%. Asian indexes futures are mostly rising today with Australia’s All Ordinaries ASX 200 Index leading gains while the report on Japan’s Consumer Price Index Excluding Food and Energy (also known as underlying inflation) showed as the core CPI declined it still remained high, which could cause monetary tightening by the Bank of Japan.

Brent is extending gains currently. Prices rebounded on Monday as Turkey stopped pumping crude from Iraq’s Kurdistan via a pipeline following an arbitration decision that confirmed Baghdad's consent was needed to ship the oil. The exports amount to 450,000 barrels per day, or about half a percent of global oil supply. US West Texas Intermediate WTI jumped 5.1% and is higher currently. Brent rose 4.2% to $78.12 a barrel on Monday.