Gold sparkles in stormy week for markets

 

 

“The road to success is dotted with many tempting parking spaces.” —Will Rogers 

 

 

HEADLINES

 

 

• Dollar slips as banking turmoil roils markets
• Gold sparkles in stormy week for markets
• Oil prices rise then dive to 15-month lows on bank fears
• Wall Street slides on fears of bank crisis contagion
• Credit Suisse sheds another 8% as traders digest emergency liquidity
• USD/CAD: Compelling reasons to push the Loonie higher are scant – Scotiabank
• GBPJPY Near Term: Upside favored

 

 

Dollar slips as banking turmoil roils markets

 

The dollar fell on Friday as concerns of further turmoil in banking rattled equity markets and sent Treasury yields lower, while driving fears that a recession lies on the horizon.

An early recovery in European stocks ran out of steam as investor sentiment remained fragile after a week of turbulence sparked by the failure of Silicon Valley Bank and concerns over Credit Suisse (CSGN.S) despite a $54 billion lifeline for the bank.

The University of Michigan's survey of consumer sentiment fell for the first time in four months even as readings on inflation expectations receded. The survey was mostly done before regulators shut SVB last week.

 

 

COMMODITIES

 

 

Gold sparkles in stormy week for markets

 

Gold prices surged more than 2% on Friday as a wave of banking crises shook global markets and put bullion on track for its biggest weekly rise in three years, while bets solidified for a less aggressive Federal Reserve in its fight against inflation.

Spot gold climbed 2.8% to $1,971.95 per ounce by 1:47 p.m. ET (1747 GMT), highest since April 2022. Bullion has added about 5.6% this week, the most since March 2020.

U.S. gold futures gained 2.6% to settle at $1,973.50.

 

 

ENERGY

 

 

Oil prices rise then dive to 15-month lows on bank fears

 

Oil prices took a dive on Friday, reversing early gains of more than $1 a barrel and falling by more than $3, as banking sector fears set crude on course for its biggest weekly decline in months.

Brent crude futures fell by $2.27, or 3.04%, to $72.43 a barrel by 11:52 a.m. EST (1552 GMT). U.S. West Texas Intermediate crude was down $2.13, or 3.1%, at $66.22.

At their session low, both benchmarks were down more than $3. Brent was on track for its biggest weekly fall since December at more than 10%, with WTI heading toward a loss of more than 11%, its biggest since last April.

 

 

STOCKS

 

 

Wall Street slides on fears of bank crisis contagion

 

Wall Street veered lower on Friday at the close of a tumultuous week, marked by the unfolding crisis in the banking sector and the gathering storm clouds of possible recession.

All three indexes were sharply lower in afternoon trading, with financial stocks (.SPNY) down the most among the major sectors of the S&P 500.

For the week, while the benchmark S&P 500 is on track to end higher than last Friday's close, the Nasdaq and the Dow have set a course for declines.

SVB Financial Group (SIVB.O) announced it would seek Chapter 11 bankruptcy protection, the latest development in an ongoing drama that began last week with the collapse of SVB and Signature Bank (SBNY.O), which sparked fears of contagion throughout the global banking system.

 

 

Credit Suisse sheds another 8% as traders digest emergency liquidity

 

Credit Suisse shares fell 8% on Friday, after soaring over the previous session as the embattled lender said it will borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.

This week’s intervention by Swiss authorities, which also reaffirmed that Credit Suisse met the capital and liquidity requirements imposed on “systemically important banks,” prompted shares to jump more than 18% on Thursday after closing at an all-time low on Wednesday. Credit Suisse also offered to buy back around 3 billion francs’ worth of debt, relating to 10 U.S. dollar-denominated senior debt securities and four euro-denominated senior debt securities.

 

 

ANALYSIS

 

 

USD/CAD: Compelling reasons to push the Loonie higher are scant – Scotiabank 

 

“The improvement in risk appetite is a modest tailwind for the CAD versus the USD while US-Canada yield spreads across the curve are less onerous for the CAD following this week’s turmoil, they remain a drag.”

“Compelling reasons to push the CAD higher are scant and that likely means more, choppy range trading between 1.35-1.38 for now.”

 

 

CHART

 

 

GBPJPY Near Term: Upside favored

 

Technical View: Long position above 160.65. Target 162.5. Conversely, break below 160.65, to open 159.97.

Comments: The pair breaks above the resistance.

 

 

 

 

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 

Footnotes

https://www.reuters.com/markets/currencies/dollar-slips-banks-rescue-makes-room-relief-rally-2023-03-17/
https://www.reuters.com/markets/commodities/gold-poised-best-week-since-mid-nov-banking-sector-tension-2023-03-17/
https://www.reuters.com/business/energy/oil-steadies-investors-take-stock-banking-crisis-2023-03-17/
https://www.reuters.com/markets/us/futures-waver-banking-crisis-worries-persist-2023-03-17/
https://www.cnbc.com/2023/03/17/credit-suisse-sheds-another-5percent-as-traders-digest-emergency-liquidity.html
https://www.fxstreet.com/news/usd-cad-compelling-reasons-to-push-the-loonie-higher-are-scant-scotiabank-202303171307