The dollar weakened and US equity futures climbed more than 1% on Monday as efforts to limit the damage from the collapse of Silicon Valley Bank soothed frayed nerves.
(Bloomberg) — The dollar weakened and US equity futures climbed more than 1% on Monday as efforts to limit the damage from the collapse of Silicon Valley Bank soothed frayed nerves.
The greenback was down versus all of its Group-of-10 counterparts, with the risk-sensitive Australian currency among the leading gainers.
Government bond yields fell heavily in Australia and New Zealand, reflecting recent moves in Treasuries, and as traders globally reassess the path of interest rate hikes and the economic cost the tightening cycle has taken already. The problems at SVB Financial Group’s bank were caused in large part by the fallout from higher US interest rates.
Preparations by the Federal Reserve and the Treasury Department for emergency measures to shore up banks were welcomed by the market. And in a reassuring move from Beijing, People’s Bank of China Governor Yi Gang was kept in his post, as were the finance and commerce ministers.
Monday’s moves in markets come after risk assets got pummeled last week, with the US stock benchmark suffering its worst week since September. Wall Street’s so-called “fear gauge” spiked, with the Cboe Volatility Index hitting the highest this year. Treasury two-year yields plummeted 28 basis points to 4.59%.
Anxiety is also running high ahead of this week’s consumer price index report, especially after Fed Chair Jerome Powell recently emphasized that a move to a faster pace of tightening would be based on the “totality of the data.”
Key events this week:
- China retail sales, industrial production, medium-term lending, surveyed jobless rate, Wednesday
- Eurozone industrial production, Wednesday
- US business inventories, retail sales, PPI, empire manufacturing, Wednesday
- Eurozone rate decision, Thursday
- US housing starts, initial jobless claims, Thursday
- Janet Yellen appears before the Senate Finance Committee, Thursday
- US University of Michigan consumer sentiment, industrial production, Conference Board leading index, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 1.3% as of 7:41 a.m. Tokyo time. The S&P 500 fell 1.4% on Friday
- Nasdaq 100 futures rose 1.3%. The Nasdaq 100 fell 1.4% Friday
- Nikkei 225 futures fell 1.3%
- Australia’s S&P/ASX 200 Index futures fell 0.5%
- Hang Seng Index futures rose 0.1%
Currencies
- The euro rose 0.5% to $1.0692
- The Japanese yen rose 0.5% to 134.29 per dollar
- The offshore yuan rose 0.3% to 6.9179 per dollar
- The Australian dollar rose 0.7% to $0.6627
Cryptocurrencies
- Bitcoin rose 2.4% to $22,010.76
- Ether rose 2.1% to $1,589.61
Bonds
- The yield on 10-year Treasuries declined 20 basis points to 3.70% Friday
- Australia’s 10-year yield declined 10 basis points to 3.48%
Commodities
- West Texas Intermediate crude rose 0.9% to $77.39 a barrel
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess.
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