Month: May 2023

ECB hikes interest rates by 25 bps to 3.25%

Posted on by Vrasidas Neofytou

 

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

ECB gives priority to curbing stubborn inflation, primarily the Core inflation index which excludes volatile items like energy and food, and stood at 5.6% in April, remaining well above the ECB’s stated 2% medium-term target.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

ECB gives priority to curbing stubborn inflation, primarily the Core inflation index which excludes volatile items like energy and food, and stood at 5.6% in April, remaining well above the ECB’s stated 2% medium-term target.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

Speaking to reporters, ECB president Christine Lagarde suggested that this may not be the final rise in its current policy tightening campaign, as the persistent EU headline inflation which stood at 7% in April, give more ground to ECB to raise rates and not pause.

ECB gives priority to curbing stubborn inflation, primarily the Core inflation index which excludes volatile items like energy and food, and stood at 5.6% in April, remaining well above the ECB’s stated 2% medium-term target.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

Speaking to reporters, ECB president Christine Lagarde suggested that this may not be the final rise in its current policy tightening campaign, as the persistent EU headline inflation which stood at 7% in April, give more ground to ECB to raise rates and not pause.

ECB gives priority to curbing stubborn inflation, primarily the Core inflation index which excludes volatile items like energy and food, and stood at 5.6% in April, remaining well above the ECB’s stated 2% medium-term target.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

As a result of the 25-bps rate hike, ECB’s deposit facility rate will climb to 3.25% from 3%, while the primary refinancing operations will rise to 3.75%, and the marginal lending facility rate will move up to 4.00%. The ECB also said it will continue to reduce its balance sheet by its current rate of €15 billion (€1 = $1.1023) per month until the end of June.

Speaking to reporters, ECB president Christine Lagarde suggested that this may not be the final rise in its current policy tightening campaign, as the persistent EU headline inflation which stood at 7% in April, give more ground to ECB to raise rates and not pause.

ECB gives priority to curbing stubborn inflation, primarily the Core inflation index which excludes volatile items like energy and food, and stood at 5.6% in April, remaining well above the ECB’s stated 2% medium-term target.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

As a result of the 25-bps rate hike, ECB’s deposit facility rate will climb to 3.25% from 3%, while the primary refinancing operations will rise to 3.75%, and the marginal lending facility rate will move up to 4.00%. The ECB also said it will continue to reduce its balance sheet by its current rate of €15 billion (€1 = $1.1023) per month until the end of June.

Speaking to reporters, ECB president Christine Lagarde suggested that this may not be the final rise in its current policy tightening campaign, as the persistent EU headline inflation which stood at 7% in April, give more ground to ECB to raise rates and not pause.

ECB gives priority to curbing stubborn inflation, primarily the Core inflation index which excludes volatile items like energy and food, and stood at 5.6% in April, remaining well above the ECB’s stated 2% medium-term target.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

In a “widely expected” action, European Central Bank (ECB) proceeded with a fresh 25 basis point interest rate hike on Thursday afternoon, marking a slowdown from a recent string of more aggressive 50-point hikes.

As a result of the 25-bps rate hike, ECB’s deposit facility rate will climb to 3.25% from 3%, while the primary refinancing operations will rise to 3.75%, and the marginal lending facility rate will move up to 4.00%. The ECB also said it will continue to reduce its balance sheet by its current rate of €15 billion (€1 = $1.1023) per month until the end of June.

Speaking to reporters, ECB president Christine Lagarde suggested that this may not be the final rise in its current policy tightening campaign, as the persistent EU headline inflation which stood at 7% in April, give more ground to ECB to raise rates and not pause.

ECB gives priority to curbing stubborn inflation, primarily the Core inflation index which excludes volatile items like energy and food, and stood at 5.6% in April, remaining well above the ECB’s stated 2% medium-term target.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

In a “widely expected” action, European Central Bank (ECB) proceeded with a fresh 25 basis point interest rate hike on Thursday afternoon, marking a slowdown from a recent string of more aggressive 50-point hikes.

As a result of the 25-bps rate hike, ECB’s deposit facility rate will climb to 3.25% from 3%, while the primary refinancing operations will rise to 3.75%, and the marginal lending facility rate will move up to 4.00%. The ECB also said it will continue to reduce its balance sheet by its current rate of €15 billion (€1 = $1.1023) per month until the end of June.

Speaking to reporters, ECB president Christine Lagarde suggested that this may not be the final rise in its current policy tightening campaign, as the persistent EU headline inflation which stood at 7% in April, give more ground to ECB to raise rates and not pause.

ECB gives priority to curbing stubborn inflation, primarily the Core inflation index which excludes volatile items like energy and food, and stood at 5.6% in April, remaining well above the ECB’s stated 2% medium-term target.

 

Euro reaction:

Euro, which was trading to near yearly highs of $1.11 a dollar just before the ECB’s rate announcement, fell and stabilized just above the key $1.10 support level after the policy decision, as investors didn’t really buy ECB President Christine Lagarde’s signals for further rate hikes to come in the following months, on growing fears over economic uncertainty and banking turmoil.

EUR/USD pair, Weekly chart

A deepening crisis across U.S. regional banks, the release of weaker-than-expected economic data, and the current ECB-FED monetary policy divergence have kept investors away from the greenback in favor of the euro, allowing EUR/USD pair to bounce off decades low of $0.95 hit on the end-September 2022, to the current highs of $1.10- $1.11 range.

 

Federal Reserve hikes rates by 25 bps to 5.25% and signals a pause

Posted on by Vrasidas Neofytou

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The benchmark borrowing rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans, and credit cards.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The benchmark borrowing rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans, and credit cards.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The world’s largest central bank -Federal Reserve- raised its fed funds borrowing interest rate by 25 bps to a target range of 5% to 5,25% on Wednesday night, as widely expected, putting them at their highest level since August 2007.

The benchmark borrowing rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans, and credit cards.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

The world’s largest central bank -Federal Reserve- raised its fed funds borrowing interest rate by 25 bps to a target range of 5% to 5,25% on Wednesday night, as widely expected, putting them at their highest level since August 2007.

The benchmark borrowing rate sets what banks charge each other for overnight lending but feeds through to many consumer debt products such as mortgages, auto loans, and credit cards.

That was Fed’s 10th interest rate increase in just over a year in its fight against persistent inflation, which stood at 5% y-y in March 2023, still well above the 2% target that policymakers consider optimum.

Adding to the above rate decision, Fed Chair Powell opened the door to a pause in Fed’s aggressive tightening cycle following the deteriorated economic and banking conditions in the United States, sending lower both the dollar and bond yields as investors see a peak in U.S. rates.

In the press conference after the rate hike, Powell warned that economic growth was cooling and that credit conditions were likely to tighten further amid growing pressure on U.S. banks, forcing the FOMC to water down its language regarding the need for additional monetary tightening.

Hence, the rate decision was accompanied by growing fears over the health of the U.S. banking system, as many regional banks tumbled in the after-hour trading amid reports that regional lender PacWest Bancorp was considering a sale amid worsening market conditions, suggesting that it could be the next domino to fall in the worst U.S. banking collapse since 2008.

 

Market reaction:

The banking turmoil, the worsening economic conditions, the worries over a U.S. recession, and the potential pause in future rate hikes, have all pressured the DXY-U.S. dollar index to monthly lows of the 101 mark, while the yield on the 2-year and 10-year Treasury Bills fell as low as 3.80% and 3.34% respectively, before bouncing higher during the day.

The weaker dollar boosted major peers, with Euro climbing up to a yearly high of $1.11, ahead of the ECB rate decision later today, the Pound Sterling rallied toward an 11-month high of $1.26, while the traditionally safe-haven Japanese Yen rose to ¥134 a dollar from increased haven demand.

Precious metals benefited from Fed Chair Powell’s tone and resumed banking turmoil, with the price of Gold briefly touching a record high of $2,080/oz before retreating lower to near $2,030/oz, while Silver also rallied toward a recent high of $26/oz, as the weaker dollar and falling bond yields make the dollar-denominated bullion less expensive for buyers with foreign currencies.

JP Morgan purchases the collapsed First Republic Bank

Posted on by Vrasidas Neofytou

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

This is the latest fallout from the collapse of two other mid-sized Silicon Valley Bank and Signature Bank in early March, the voluntarily liquidated crypto-focused Silvergate Bank, and the rescue of the Swiss giant Credit Suisse.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

This is the latest fallout from the collapse of two other mid-sized Silicon Valley Bank and Signature Bank in early March, the voluntarily liquidated crypto-focused Silvergate Bank, and the rescue of the Swiss giant Credit Suisse.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

The fresh trading week started with an important announcement saying that the U.S. giant lender JP Morgan purchased the battered U.S. regional lender First Republic Bank (FRC).

This is the latest fallout from the collapse of two other mid-sized Silicon Valley Bank and Signature Bank in early March, the voluntarily liquidated crypto-focused Silvergate Bank, and the rescue of the Swiss giant Credit Suisse.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

The fresh trading week started with an important announcement saying that the U.S. giant lender JP Morgan purchased the battered U.S. regional lender First Republic Bank (FRC).

This is the latest fallout from the collapse of two other mid-sized Silicon Valley Bank and Signature Bank in early March, the voluntarily liquidated crypto-focused Silvergate Bank, and the rescue of the Swiss giant Credit Suisse.

Regulators seized the First Republic early Monday morning and sold most of the bank’s operations to JPMorgan Chase, where the full balance of all customer deposits will be transferred to the new bank, coupled with $173 billion of loans and $30 billion of securities in the deal.

JPMorgan was one of several interested buyers including PNC Financial Services Group, and Citizens Financial Group Inc, which submitted final bids on Sunday in an auction by U.S. regulators. PNC will get its $1 billion back with the First Republic sale as a missed opportunity.

The deal was necessary to resolve the larger banking failure in 2023’s banking turmoil, and the largest collapse since Washington Mutual in 2008, and came less than a week after the company disclosed more than $100 billion in outflows in the first quarter of 2023, and a plan to explore new options.

San Francisco-based First Republic was among regional U.S. lenders most battered by a crisis in confidence in the banking sector in early March when depositors walked away from smaller and regional banks to giant lenders like JPMorgan as they panicked over the collapse of two other mid-sized U.S. banks.

First Republic Bank stock, Weekly chart

Yet, the biggest losers of the sale transaction would be the First Republic common shareholders, which saw the price of the bank falling from $125 per share at the beginning of the banking crisis in early March to as low as $3.51 on last Friday, April 28, when First Republic stock stopped trading on the New York Stock Exchange.

FRC shares topped at nearly $220 per share at the end of November 2022, before starting a downward momentum spiral until last Friday, losing over 98% of its value in a six-month period only.

Australian dollar rallies over 1% after an unexpected 25 bps rate hike by RBA

Posted on by Vrasidas Neofytou

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

Aussie rallies across the board after the Reserve Bank of Australia unexpectedly hiked its cash target rate by 25 basis points, to 3.85% on Tuesday morning, surprising forex investors when most had expected a pause in the rate hike cycle as it was the case in the previews meeting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

Aussie rallies across the board after the Reserve Bank of Australia unexpectedly hiked its cash target rate by 25 basis points, to 3.85% on Tuesday morning, surprising forex investors when most had expected a pause in the rate hike cycle as it was the case in the previews meeting in April.

AUD/USD pair, 2-hour chart

AUD/USD pair added over 1% climbing to above the key $0.67 level, and recovering most of last week’s steep losses, which saw the pair bottoming at $0.6550 before bouncing higher.

The RBA decided to hike further its interest rates to curb persistent inflation in the country, where the inflation measure “Consumer Price Index (CPI)” stood at 7% in Q1, 2023, just above the forecasted 6.9%, and still well above the RBA’s target range of 2%.

The hotter-than-expected inflation has prompted RBA to consider more potential rate hikes ahead, although future action will largely depend on economic data and growth. The central bank forecasts 2023′s full-year inflation to stand at 4.5%.

RBA is also forecasting a below-average growth in the coming years, a 2023 GDP of 1.25%, well below the 2.7% growth seen in 2022, as high-interest rates weigh on business and consumer confidence, and as a post-COVID economic rebound runs out of steam.

Adding to the above, Australia’s largest trading partner, China, is also facing slower-than-expected economic and industrial post-Covid recovery, with the Chinese manufacturing sector unexpectedly contracting in April.

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