The JPY is the strongest and the USD is the weakest as the NA session begins | Forexlive
The JPY is the strongest and the USD is the weakest as the North American session begins. Over the weekend, Signature Bank was shuttered by the regulators adding to the fallout from SVB shutdown on Friday. The weekend also saw the Fed and Treasury/FDIC come in to stave off runs on other banks by guaranteeing uninsured deposits (not just limited to $250,000).
The Fed and Treasury also said they would use emergency-lending authorities to make more funds available to meet demands for bank withdrawals. The mote has been put in place to protect banks. That does not mean there will not be a continued fallout, and the markets are reacting.
As such, the USD is the weakest of the majors as the tide switches from the potential of a 50 bp hike by the Fed at the next meeting is turning to the potential for no hike at all. The 2 year yield is down -46 basis points to 4.13%. On Wednesday last week, the 2 year hit a high yield of 5.085%. That is nearly 100 bps in 3 -4 trading days. That move comes after a NFP which showed 311K were added to payrolls. There is a 71% chance now for no change in rates when the Fed meets on March 22.
The peak rate is down to 4.73% that’s down from 5.69% on Wednesday
The JPY is benefitting from USD selling and a “flight to the relative safety of the JPY” flows (or so they say).
US stocks are mixed now with the Dow and the S&P lower and the Nasdaq is higher. Gold is higher. Oil is lower. Bitcoin is higher over the weekend.
A snapshot of the markets is showing:
- Spot gold is trading up $23.54 or 1.26% at $1890.53
- spot silver is trading up $0.59 or 2.81% at $21.11
- WTI crude oil is trading down $1.84 at $74.84 as it response to the potential for slower growth
- Bitcoin is trading at $22,177. On Friday it closed near $20,220.
In the premarket for US stocks, the major indices are mixed:
- Dow Industrial Average is a trading down 62 points after Friday’s -345.22 point decline
- S&P index is trading near unchanged after Friday’s -56.73 point decline
- NASDAQ index is up 99 points after Friday’s minus 199.47.1
In the European equity markets, those indices are sharply lower:
- German DAX is down -2.49%
- Frances CAC is down -2.31%
- UK’s FTSE 100 is down -2.02%
- Spain’s Ibex is down -3.09%
in the Asia-Pacific markets:
- Japan’s Nikkei fell -1.11%
- China’s Hang Seng index rose 1.95%
- Australia’s S&P/ASX index fell -0.5%
- Shanghai composite Index rose 1.2%
in the US debt market, yields are sharply lower:
- two year yield 4.18%, -40 basis points
- five year yield 3.688% -26.4 basis points
- 10 year yield 3.54% -17.1 basis points
- 30 year yield 3.612% -8.7 basis points
The 2-10 year spread has widened to around -68 basis points. It was above -105 basis points last week and closed on Friday at -89.3 basis points.
In the European debt market, benchmark 10 year rates are also sharply lower: