Global financial markets extend losses on contagion fears

Posted on March 13, 2023March 13, 2023 by Vrasidas Neofytou

On Monday morning, Britain’s finance minister Jeremy Hunt said the government and the Bank of England had facilitated a private sale of the UK arm of Silicon Valley Bank to HSBC for £1, in a move which would protect deposits and the UK Banking system without taxpayer support.

SVB UK sale on HSBC:

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

The measures aimed at strengthening confidence in the banking sector after SVB’s failure spurred worry about spillover effects in the financial ecosystem. The moves were necessary as investors had been concerned about the health of the financial system after state regulators closed New York-based Signature Bank (SBNY.O) on Sunday, the second bank failure last week.

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

On Sunday night, U.S. Treasury, Federal Reserve, and Federal Deposit Insurance Corp. jointly announced a range of measures to stabilize the banking system and said depositors at SVB would have access to their deposits on Monday.

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Due to the growing concern about financial stability, investors speculate the Fed would now be reluctant to rock the boat by lifting interest rates by a super-sized 50 basis points on March 21-22 – and might not even hike at all.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Shares in HSBC fell nearly 4% after news that the British bank had stepped in to buy SVB UK for £1, Commerzbank slid around 12%, and Credit Suisse was down 9.4%, while the pan-European Stoxx 600 banking index fell more than 5%.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

The banking sector has been receiving the most of the selling pressure, with some of the world’s largest banks falling over 3% on pre-market, while regional banks fell even more, led by a 60% drop in First Republic.

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Dow futures were down over 150 points, or 0.60%, erasing nearly 1% gains earlier in the session S&P 500 futures also erased gains and were last down 0.40%, while tech-focused Nasdaq-100 futures advanced only 0.2%, erasing nearly 2% earlier gains.

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

U.S. stock futures opened sharply higher on Sunday night after U.S. regulators unveiled a plan to stem the damage from Silicon Valley Bank’s collapse, while they turned negative during the European session amid fears of a contagion in the banking system.

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Market reaction:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Market reaction:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

SVB collapse threatened to have a significant impact on global technology companies, given the importance of the lender to some tech startups in Silicon Valley, and a possible failure posed an “existential threat” to the growth-sensitive sector.

Market reaction:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Market reaction:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Friday’s dramatic failure of SVB Financial Group, which focuses on tech startups, was the biggest bank collapse in the U.S. since the 2008 financial crisis.

Market reaction:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Friday’s dramatic failure of SVB Financial Group, which focuses on tech startups, was the biggest bank collapse in the U.S. since the 2008 financial crisis.

Market reaction:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

U.S. stock futures and European markets were under pressure on Monday morning extending last week’s steep losses after the collapse of the Silicon Valley Bank (SVB) and Signature Bank despite efforts from the U.S. and UK authorities to avert a banking crisis and strengthening public confidence over the weekend.

Friday’s dramatic failure of SVB Financial Group, which focuses on tech startups, was the biggest bank collapse in the U.S. since the 2008 financial crisis.

Market reaction:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Friday’s dramatic failure of SVB Financial Group, which focuses on tech startups, was the biggest bank collapse in the U.S. since the 2008 financial crisis.

Market reaction:

S&P 500 futures, 2-hour chart

Looking at the EU market, most of the indices were trading over 2% lower on Monday morning led by the banking, insurance, and financial sectors, following the losses on Wall Street futures.

U.S. authority intervention:

Regulators introduced a new backstop for banks that Federal Reserve officials said was big enough to protect the nation’s deposits:

• The FDIC said it will resolve SVB in a way that that “fully protects all depositors.” Similarly, “all depositors” at Signature will be made whole.

• The Fed also announced a new “Bank Term Funding Program” that offers one-year loans to banks under easier terms than it typically provides.

• The Fed also is relaxing terms for lending through its discount window, its main direct lending facility.

SVB UK sale on HSBC:

Cryptos extend losses as lender Silvergate Capital is shutting operations

Posted on March 9, 2023 by Vrasidas Neofytou

Since the news of the late 10-K filing on March 1, Silvergate’s stock price has fallen over 60% to a record low of $4.90 on Wednesday, nearly 98% down since its all-time high of $219, hit on November 14, 2021.

The platform disconnection followed the postponement of the filing of its annual 10-K financial report for 2022 on March 01, a document required by the Securities and Exchange Commission that provides a comprehensive overview of a company’s business and financial condition.

The liquidation comes less than a week after Silvergate discontinued its payments platform known as the SEN-Silvergate Exchange Network (announced on March 03, 2023), which was one of its core offerings.

It had suffered catastrophic losses on its portfolio of bonds when the mass flight from crypto as an asset class in the wake of FTX’s collapse caused Silvergate’s crypto clients to pull their funds from the bank to meet redemption requests from their own customers.

The crypto lender decided to shut down its Bank operations and proceed with a voluntary liquidation of the assets on Wednesday, adding in a statement that all deposits will be fully repaid, according to a liquidation plan.

California-based Silvergate offered traditional banking services to several big crypto exchanges, and it served as one of the two leading banks for crypto companies with over $11 billion in assets, along with the leading crypto-friendly New York-based Signature Bank with over $114 billion assets.

Bitcoin, 2-hour chart

The news of its decision to liquidate dealt a fresh blow to cryptocurrency prices, pushing Bitcoin and Ethereum down to a one-month low of $21,500 and $1,530 respectively, while the smaller in-value token Solana broke below $19, and the metaverse-led Mana fell to $0.55, more than 25% from their yearly highs.

Bitcoin, 2-hour chart

Cryptocurrencies continued their downward momentum this afternoon after the crypto lender Silvergate Capital said on Wednesday it intends to wind down operations and voluntarily liquidate Silvergate Bank in an orderly manner and in accordance with applicable regulatory processes.

Bitcoin, 2-hour chart

Financial markets in deep red after Powell’s hawkish testimony

Posted on March 8, 2023March 9, 2023 by Vrasidas Neofytou

Precious metals Gold and Silver extended recent losses to nearly $1,810/oz and $20,50/oz, despite being known as an inflation hedge since the higher interest rates dent bullion’s appeal as they increase the opportunity cost of holding a zero-yield asset.

Hence, the stronger dollar also weighted negatively on the value of the dollar-denominated commodities, making them less affordable for overseas buyers. Both Brent and WTI crude oil prices lost 3.50% to $82.80/b and $77/b respectively, while the growth-sensitive Copper broke below the $4/lb key support level.

The sharp decline for stocks was accompanied by a spike in bond yields, with the rate on the 2-year Treasury surpassing 5% and touching the highest level since 2007, while the rate on the 10-year Treasury rose to 4% key resistance level.

U.S. stock indexes also fell sharply after the remarks. The Dow Jones closed nearly 575 points lower or 1.70% and turned negative for 2023, the S&P 500 slid 1.53% to close below the key 4,000 thresholds, while the yield-sensitive Nasdaq Composite lost 1.25% to 11,530.

DXY-U.S. dollar index, Daily chart

DXY-U.S. dollar index, which tracks the greenback against major peers, jumped 1% to a three-month high of 105.80 mark, pushing lower the Euro to $1.0530, the Pound Sterling to $1.1820, the Australian dollar to $0.66, and the risk-sensitive Bitcoin toward $22,000 support level.

DXY-U.S. dollar index, Daily chart

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Some analysts and investors expressed that there is a reasonable chance that the Fed will have to bring the Fed Funds rate to 5.50%-6%, and then keep it there for an extended period to slow the economy and get inflation down to nearly 2%.

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Let’s remind that Fed raised rates by 25 basis points on February 01, bringing the federal funds rate to a range of 4.50% to 4.75%, after a 50-basis point increase in December that came in the wake of four consecutive 75 basis-point increases.

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Powell’s commentary opened the door to resume larger hikes of 50 basis points at the next Fed’s policy meeting on March 21-22, with would bring the rate to a range of 5% to 5.25%.

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Powell’s commentary opened the door to resume larger hikes of 50 basis points at the next Fed’s policy meeting on March 21-22, with would bring the rate to a range of 5% to 5.25%.

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Fed’s Chair Powell told Congress the central bank would likely need to increase interest rates more than expected considering recent robust macroeconomic data and is prepared to move in larger steps if the “totality” of incoming economic data suggests tougher measures are needed to control persistent inflation.

Powell’s commentary opened the door to resume larger hikes of 50 basis points at the next Fed’s policy meeting on March 21-22, with would bring the rate to a range of 5% to 5.25%.

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Powell’s commentary opened the door to resume larger hikes of 50 basis points at the next Fed’s policy meeting on March 21-22, with would bring the rate to a range of 5% to 5.25%.

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Growth-sensitive financial markets and most commodities ended Tuesday’s trading session in deep red while U.S dollar and bond yields surged after Federal Reserve Chair Jerome Powell signaled interest rate hikes could come at a faster pace from the U.S. central bank in his testimony to a congressional committee.

Powell’s commentary opened the door to resume larger hikes of 50 basis points at the next Fed’s policy meeting on March 21-22, with would bring the rate to a range of 5% to 5.25%.

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

Powell’s commentary opened the door to resume larger hikes of 50 basis points at the next Fed’s policy meeting on March 21-22, with would bring the rate to a range of 5% to 5.25%.

Market reaction:

Powell’s hawkish remarks boosted U.S. dollar and Treasury yields on prospects for higher interest rates, which in return took out from the market the appetite for risk assets.

DXY-U.S. dollar index, Daily chart

U.S. stocks advance ahead of Fed Chair Powell’s testimony

Posted on March 7, 2023 by Vrasidas Neofytou

The weaker dollar gave the opportunity to major risk-sensitive currencies to rebound, with Euro recovering toward the $1.07 key resistance level, and the Pound Sterling jumping as high as $1.2050.

The DXY-U.S. dollar index, which measures it against six major rivals, fell as low as 104.170 overnight, before rebounding to nearly 104.50 a few hours before the kick-off of the testimony.

The weaker dollar gave the opportunity to major risk-sensitive currencies to rebound, with Euro recovering toward the $1.07 key resistance level, and the Pound Sterling jumping as high as $1.2050.

The DXY-U.S. dollar index, which measures it against six major rivals, fell as low as 104.170 overnight, before rebounding to nearly 104.50 a few hours before the kick-off of the testimony.

The weaker dollar gave the opportunity to major risk-sensitive currencies to rebound, with Euro recovering toward the $1.07 key resistance level, and the Pound Sterling jumping as high as $1.2050.

The Fed slowed the pace of rate hikes to 25 basis points at its last meeting on Feb. 1, after a 50-basis point increase in December that came in the wake of four consecutive 75 basis-point increases.

The DXY-U.S. dollar index, which measures it against six major rivals, fell as low as 104.170 overnight, before rebounding to nearly 104.50 a few hours before the kick-off of the testimony.

The weaker dollar gave the opportunity to major risk-sensitive currencies to rebound, with Euro recovering toward the $1.07 key resistance level, and the Pound Sterling jumping as high as $1.2050.

The Fed slowed the pace of rate hikes to 25 basis points at its last meeting on Feb. 1, after a 50-basis point increase in December that came in the wake of four consecutive 75 basis-point increases.

The DXY-U.S. dollar index, which measures it against six major rivals, fell as low as 104.170 overnight, before rebounding to nearly 104.50 a few hours before the kick-off of the testimony.

The weaker dollar gave the opportunity to major risk-sensitive currencies to rebound, with Euro recovering toward the $1.07 key resistance level, and the Pound Sterling jumping as high as $1.2050.

In other words, investors are afraid that the Federal Reserve will push interest rates higher than previously expected and keep them elevated for longer to curb inflation.

The Fed slowed the pace of rate hikes to 25 basis points at its last meeting on Feb. 1, after a 50-basis point increase in December that came in the wake of four consecutive 75 basis-point increases.

The DXY-U.S. dollar index, which measures it against six major rivals, fell as low as 104.170 overnight, before rebounding to nearly 104.50 a few hours before the kick-off of the testimony.

The weaker dollar gave the opportunity to major risk-sensitive currencies to rebound, with Euro recovering toward the $1.07 key resistance level, and the Pound Sterling jumping as high as $1.2050.

In other words, investors are afraid that the Federal Reserve will push interest rates higher than previously expected and keep them elevated for longer to curb inflation.

The Fed slowed the pace of rate hikes to 25 basis points at its last meeting on Feb. 1, after a 50-basis point increase in December that came in the wake of four consecutive 75 basis-point increases.

The DXY-U.S. dollar index, which measures it against six major rivals, fell as low as 104.170 overnight, before rebounding to nearly 104.50 a few hours before the kick-off of the testimony.

The weaker dollar gave the opportunity to major risk-sensitive currencies to rebound, with Euro recovering toward the $1.07 key resistance level, and the Pound Sterling jumping as high as $1.2050.

According to Reuters, Fed funds futures traders are pricing in a 76% probability the Fed will raise rates by 25 basis points at its March 22 meeting. They also expect interest rates to peak at 5.48% in September and still be above 5% at the end of 2022.