Gold rallies over 1% as Credit Suisse crisis hits risk appetite

 

 

“Everything you’ve ever wanted is on the other side of fear.” —George Addair

 

 

HEADLINES

 

 

• Dollar gains in safe-haven buying as Credit Suisse sparks wider banking fears
• Gold rallies over 1% as Credit Suisse crisis hits risk appetite
• Oil slumps $5/bbl to lowest in more than a year as banking fears mount
• Wall Street regulator proposes new hacking, data and market resiliency rules
• Bitcoin is already up 50% this year — beating stocks and gold
• EUR/USD: Move below 1.0463 would mark a significant downturn – Credit Suisse
• GBPUSD Near Term: Downside favored

 

 

Dollar gains in safe-haven buying as Credit Suisse sparks wider banking fears

 

The dollar rose on Wednesday on safe-haven buying after Credit Suisse's stock tumbled following the disclosure of "weaknesses" in its financial reporting that renewed investor concerns that a full-blown global banking crisis may be brewing.

European currencies fell sharply against the dollar after Credit Suisse (CSGN.S) shares plummeted 15.6% after its biggest investor, citing regulatory issues about the size of its holding, said it was unable to increase its stake.

Concerns about the Swiss bank led the European banking index (.SX7P) to fall 6.12%, its biggest one-day drop in more than a year, and triggered a sharp decline in European and U.S. bond yields as investors questioned if the Federal Reserve and other central banks can keep hiking interest rates to curb inflation.

 

 

COMMODITIES

 

 

Gold rallies over 1% as Credit Suisse crisis hits risk appetite

 

Gold prices climbed over 1% to their highest since early February on Wednesday as a fresh crisis in the banking sector turned investors away from seemingly riskier assets and drove them to the safety of bullion.

Spot gold jumped 1.3% to $1,925.97 per ounce by 11:56 a.m. EDT (1556 GMT). U.S. gold futures gained 1.1% to $1,930.80.

Europe's bank stocks came under pressure again, with Credit Suisse (CSGN.S) shares sliding after its largest investor said it could not provide the Swiss bank with more financial assistance.

 

 

ENERGY

 

 

Oil slumps $5/bbl to lowest in more than a year as banking fears mount

 

Oil prices plunged more than $5 a barrel on Wednesday to their lowest in more than a year as unease over Credit Suisse spooked world markets and offset hopes of a Chinese oil demand recovery.

Early signs of a return to market stability faded after Credit Suisse's largest investor said it could not provide the Swiss bank with more financial assistance, sending its shares and other European equities sliding.

 

 

STOCKS

 

 

Wall Street regulator proposes new hacking, data and market resiliency rules

 

The top U.S. markets regulator on Wednesday proposed a suite of new policies designed to harden the financial system against hacking, data theft and systems failure.

With some dissents from Republican members, the Securities and Exchange Commission's (SEC) five members voted at a public meeting to propose rules on protecting consumer financial data, preventing hacking at stock exchanges and broker-dealers and buttressing the resiliency of market infrastructure, part of a continuing concern with modernizing regulations to match advancing technological threats.

SEC Chairman Gary Gensler also opened the meeting with a nod to unfolding market turmoil, making veiled reference to the failure of U.S. lender Silicon Valley Bank and fears for the viability of Credit Suisse by restating his agency's pledge to support market resiliency.

 

 

Bitcoin is already up 50% this year — beating stocks and gold

 

Bitcoin is up 50% this year despite the collapse of major crypto-focused banks, beating major stock indexes and commodities.

On Jan. 1, bitcoin began trading at just over $16,500. On Wednesday, it was hovering around the $25,000 mark, thanks to a rally that began on Sunday.

The surge in price this year comes after bitcoin crashed 65% in 2022 after a number of major collapses of projects and hedge funds, bankruptcies, liquidity issues and the failure of FTX, one of the world’s biggest cryptocurrency exchanges.

 

 

ANALYSIS

 

 

EUR/USD: Move below 1.0463 would mark a significant downturn – Credit Suisse 

 

“EUR/USD continues to hold above key support from the 38.2% retracement of the 2022/2023 rally and early January YTD low at 1.0483/63 and our bias remains for this to hold for a broad range.”

“Above 1.0806 remains seen needed to reassert an upward bias for strength back to the 50% retracement of the 2021/2022 fall at 1.0944, then a retest of the 1.1035 YTD high.” 

“Below 1.0463 though would mark a ‘head and shoulders’ top and a potentially more significant downturn, although we would still need to see the 200-DMA at 1.0326 removed to suggest this is indeed the case for support next at 1.0223/1.0198.”

 

 

CHART

 

 

GBPUSD Near Term: Downside favored

 

Technical View: Short position below 1.21. Target 1.1999. Conversely, break above 1.21, to open 1.215.

Comments: The pair breaks below support.

 

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 

Footnotes
 

https://www.reuters.com/markets/currencies/dollar-finds-footing-banking-crisis-fears-calm-down-2023-03-15/
https://www.reuters.com/markets/commodities/gold-tight-range-with-focus-feds-rate-hike-moves-2023-03-15/
https://www.reuters.com/markets/commodities/oil-prices-bounce-back-helped-by-stronger-opec-outlook-china-2023-03-15/
https://www.reuters.com/legal/transactional/wall-street-regulator-unveils-new-hacking-data-market-resiliency-rules-2023-03-15/
https://www.cnbc.com/2023/03/15/bitcoin-btc-price-is-up-50percent-this-year-outperforming-stocks-and-gold.html
https://www.fxstreet.com/news/eur-usd-move-below-10463-would-mark-a-significant-downturn-credit-suisse-202303151418