Market sentiment:
- Are we actually getting more questions than answers at this point?
- The nerves are starting to show up in markets again
Inflation:
- Japan's trade union confederation says agreed to average of 3.8% wage hikes for FY2023
- Eurozone February final CPI +8.5% vs +8.5% y/y prelim
ECB:
- ECB's Simkus says terminal rate hasn't been reached yet
- ECB's Villeroy: We did what we said we would do on rates
- ECB's Kazimir: We are not at the finish line
- Morgan Stanley now forecasts ECB terminal rate of 3.75% (previously 4%)
- HSBC sees two more 25 bps rate hikes by the ECB to follow
- Goldman Sachs expects ECB to hike rates by 25 bps in May next
China:
- PBOC announces cut to banks' reserve requirement ratio by 25 bps
- China president Xi to travel to Russia on 20-22 March
Markets:
- JPY leads, USD lags on the day
- European equities lower; S&P 500 futures down 0.2%
- US 10-year yields 8 bps 3.608%
- Gold up 0.8% to $1,933.94
- WTI crude up 0.5% to $68.68
- Bitcoin up 8.8% to $26,909
It was a quiet session mostly but things are starting to heat up again now as we look towards US trading.
There was a sense of calm in markets early on in European trading, with bond yields sitting comfortably higher and equities also observing slight gains. However, all of that quickly dissipated as the nerves are starting to show up again with traders and investors still on high alert on the whole global banking situation.
Major players on Wall Street and the Fed may have helped to induce some calm with regards to First Republic Bank but we'll see in the session ahead whether or not that will be enough to keep the shorts away.
As we look towards the session ahead, bond yields are falling off and equities are being pushed lower as the mixed fortunes this week continue to play out.
In FX, the dollar is slightly weaker on the balance of things but has seen its early losses pared somewhat now. EUR/USD was up to around 1.0670 and hanging around large option expiries before dropping back to 1.0630, still up 0.2% on the day though.
Meanwhile, USD/JPY is keeping pressured and down over 100 pips to 132.60 amid lower bond yields. GBP/USD was also seen up to around 1.2175 earlier before coming back down to be little changed around 1.2130 currently.
Elsewhere, AUD/USD is still up 0.6% to 0.6690 levels and down just slightly from its earlier levels around 0.6700-10 mostly in European morning trade.
There's still plenty to play for before the end of the week, so now we move over to North America to find out what the next twist will be.
