Yen Falls as Financial Stocks Rise and Bank Concerns Ease, S&P 500 on the Rise in U.S. Market

In the US stock market on the 27th, the S & P 500 stock price index continued to rise for three business days. Financial stocks were bought as fears of widespread turmoil in the banking sector eased. Meanwhile, technology stocks fell.

The S&P 500 financial stock index rose more than 1%. Energy stocks also performed well. Meanwhile, the tech-heavy Nasdaq 100 Index fell 0.7%.

On this day, the index of regional bank stocks rose about 2.5%.of the failed Silicon Valley Bank (SVB)First Citizens Bankshares, which has agreed to take over, is up more than 50%. First Republic Bank is also expensive.U.S. regulators need more to help banks, including expansion of emergency lending facilityAs it was being considered, Bloomberg News reported, citing people familiar with the matter. The idea was to give the First Republic time to repair its balance sheet, he said.

“The market has been pushing and pulling between banking and technology stocks,” said Joe Gilbert, portfolio manager at Integrity Asset Management. A lot of money has flowed out of stocks,” he said. “There is a lot going on behind the scenes right now. Interest rates are rising again, which is also dampening the trading of tech stocks.”

“It’s certainly nerve-wracking, but what we’ve done so far has definitely prevented a much worse situation,” said Craig Earlam, senior market analyst at Oanda. Confidence will gradually improve,” he said. “It’s obviously hypothetical at this point,” he continued.

US Treasuries

U.S. Treasuries fell as worries about the banking sector eased. Weak demand for 2-year bond auctions also played a role. The market’s 0.25 percentage point chance of a rate hike in May is again above 50%.

The 10-year and 2-year yields continue to invert, signaling a downturn ahead. “The recent banking turmoil has strengthened our belief that we will have a deeper recession this year than we thought,” said Chris Senick of Wolf Research.

foreign exchange

The dollar fell in the foreign exchange market. The rise in U.S. stocks is the background. The dollar fell against all 10 major currencies except the yen and the New Zealand dollar.

The dollar rose against the yen to the mid-131 yen level to the dollar. At one point, it rose 0.8% to 131.76 yen. This was supported by rising U.S. Treasury yields. The euro rose 1.1% against the yen at one point.

“The outlook for the dollar has turned for the worse, with the dollar declining more pronounced as the US tightening cycle matures and the gap between dollar-friendly growth and interest rates narrows,” said Sean Osborne, chief currency strategist at Scotiabank. We have previously argued that there is a risk that the dollar could weaken earlier, although we thought this was more of a late-year scenario. “It’s going to be a slightly bigger drop than reflected,” he said in a report.

crude

The New York crude oil futures market rebounded sharply, hitting a two-week high. Optimism that further bank turmoil will be averted increased, and supply disruptions in Turkey also helped.

A deal by First Citizens BankShares Inc. to buy SVB has allayed fears that turmoil in the banking sector could escalate into a wider crisis. In addition, a legal dispute between Iraq’s Kurdish Autonomous Region and Turkey has resulted in the suspension of crude oil exports of approximately 400,000 barrels per day. This has also contributed to the rise in crude oil prices.

“Crude oil is rebounding today as financial market calms halt the outflow of funds from the broader oil market,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.

WTI futures for May on the New York Mercantile Exchange (NYMEX) closed at $72.81 a barrel, up $3.55 (5.1%) from the previous trading day. London ICE North Sea Brent May delivery rose $3.13, or 4.2%, to $78.12 on the day.

Money

The New York gold market continues to fall. Demand for gold as a safe haven continued to falter as the US Fed is expected to take further steps to help the banking industry.

Risky assets rose while gold sold on reports that U.S. regulators are considering additional measures to give First Republic Bank more time to repair its balance sheet. A swift response by U.S. and Swiss authorities to the financial sector has eased fears that it could escalate into a full-blown crisis.

Banking turmoil has dampened expectations of more rate hikes by the U.S. Federal Reserve, and swap traders are pricing in multiple cuts this year. Fed officials, however, have dismissed speculation of a rate cut this year.

“Gold has not risen further because there is a big gap between market expectations of a rate cut and the Fed’s implied status quo stance,” said Ole Hansen, head of commodity strategy at Saxo Bank. “The latter increases short-term downside risks,” he said.