As we enter the final week of March, global financial markets are gearing up for another potential turmoil. Worries about banks have dominated sentiment in the U.S. and Europe this month, complicating efforts by the U.S. and other Fed officials to curb inflation.
In the Sydney foreign exchange market on the morning of the 27th, the yen and the Swiss franc were temporarily quoted at 0.2% against the dollar.Russian President Vladimir Putin says he is preparing to deploy tactical nuclear weapons in BelarusFollowing the statement, traders are seeking safe haven assets.
Meanwhile, the euro was little changed after European Central Bank (ECB) Vice President de Guindos said the ECB would take a meeting-by-policy approach on interest rate policy amid uncertainties in the banking sector. .
Demand for assets seen as safe has increased, and yen-buying has been particularly strong as concerns about the health of a series of banks and the potential for a U.S. recession have swayed markets. be seen.
On the 24th, Deutsche Bank was subject to strict investor scrutiny and its shares were sold, and U.S. Treasury Secretary Yellen held an emergency meeting of the Financial Stability Oversight Council (FSOC), and global markets were once again. I saw a big change.
The U.S. Treasury Department said some banks were under stress after the FSOC meeting, but the overall U.S. financial system remained sound and resilient.statementannounced.
U.S. officials will decide whether and how to help the troubled First Republic Bank to give it time to build up its balance sheet, people familiar with the matter said. Are considering.
Meanwhile, Valley National Bancorp and First Citizens BankShares are each looking to buy the failed Silicon Valley Bank (SVB), according to a person familiar with the matter.
In addition, the head of the Swiss Federal Financial Market Supervisory Authority (FINMA) is of the opinion that there is a possibility that the Credit Suisse Group, which the UBS Group has rescued and merged, will be investigated.expressed.
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Problems in the banking sector have triggered a significant shift in the outlook for monetary policy among bond traders. While the US Federal Open Market Committee (FOMC) meeting in May has abandoned further interest rate hike speculation, the view that it will turn to a rate cut in June has increased. Expectations for further interest rate hikes by the ECB and the Bank of England have also receded.
The yen has gained about 4% this month, outperforming other major currencies. In addition to the increase in volatility, the interest rate differential with Japan narrowed due to the decline in bond yields in other countries. Commodity currencies such as the Australian dollar and New Zealand have underperformed.
news-rsf-original-reference paywall">Original title:Investors Brace for Another Week of Turmoil as Mad March Ends(excerpt)
