In other words, as soon as there is a problem in one bank, fear is real. “Problem is that nobody wants to be the last one in a room turning off the light. The KBW Bank Index logged its biggest one-day drop since the start of the Covid-19 pandemic. The fallout from SVB’s collapse prompted President Joe Biden to promise stronger regulation of US lenders, while reassuring depositors that their money is safe.įirst Republic Bank plunged 62% as heightened worries about the state of US regional banks triggered trading halts across the sector. The S&P 500 closed the day down 0.2%, after bouncing between gains and losses amid a rout in bank shares while the policy-sensitive Nasdaq climbed 0.8%, the most in over a week. Nomura economists took it one step further, saying the Fed could cut its target rate next week.Įxpectations had weighed a hike of as much as 50 basis points after Chair Jerome Powell addressed lawmakers last Tuesday. are saying the Fed could take a breather on the policy rate following the collapse of SVB. economists as well as asset managers at the world’s largest actively managed bond fund from Pacific Investment Management Co. Swaps traders are now pricing a less than 60% chance the Fed will hike by another quarter percentage-point later this month. The market turmoil has caused a swift reassessment over the direction of Fed policy. Traders will soon turn their attention back to Tuesday’s consumer price index report, which could drive further bets on the Federal Reserve’s next move.
The dollar erased its gains for the year on Monday. The two-year yield dropped by more than a half-percentage point, logging the biggest three-day retreat since Black Monday of October 1987, as investors poured into haven assets.
(Bloomberg) - The yield on the two-year Treasury note plunged in its biggest one-day slump in decades, while tech stocks rebounded from last week’s rout as the collapse of Silicon Valley Bank reverberated across trading desks. This content was published on Ma21:02 Ma21:02 minutes
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