Oil falls to nine-week low on inflation worries, U.S. bank shutdowns

“Failure will never overtake me if my determination to succeed is strong enough.” —Og Mandino 

 

 

HEADLINES

 

 

• Sterling rolls off one-month high against dollar
• Gold’s crisis-driven surge halted by rising U.S. bond yields
• Oil falls to nine-week low on inflation worries, U.S. bank shutdowns
• S&P 500 jumps 1% as regional banks rebound: Live updates
• 2-year Treasury yield rebounds after biggest 3-day slide since 1987
• EUR/USD: Sustained break above 55-DMA at 1.0719 to boost near-term outlook – Scotiabank
• EURUSD Short Term: Upside favored

 

 

Sterling rolls off one-month high against dollar

 

 

Sterling dipped against the dollar on Tuesday, but still traded near its one-month high hit a day earlier after market turmoil led to a dramatic pullback in U.S. rate expectations and short-term yields and sent the greenback tumbling.

U.S. inflation data due later in the day will also have an effect on currencies, though while a week ago it was seen as one of the month's main events for markets its consequences will likely be somewhat swamped by recent volatility.

The pound was 0.2% lower against the dollar at $1.2156 , just off the previous day's top of $1.220, its highest since Feb. 14.

 

 

COMMODITIES

 

 

Gold’s crisis-driven surge halted by rising U.S. bond yields

 

 

Gold fell on Tuesday as a rise in Treasury yields took the shine off its recent rise that was driven by the U.S. banking crisis, while an uptick in U.S. inflation in February raised more questions than answers on interest rates.

Spot gold last fell 0.34% to $1,906.8 per ounce. U.S. gold futures dropped 0.2% to $1,912.0.

Higher benchmark U.S. 10-year Treasury yields weigh on zero-yielding gold’s appeal.

Gold showed little reaction to U.S. Consumer Price Index (CPI) data, which showed CPI rose 0.4% on a monthly basis in February, as expected, after accelerating 0.5% in January.

 

 

ENERGY

 

 

Oil falls to nine-week low on inflation worries, U.S. bank shutdowns

 

 

Oil prices dropped about 3% to a nine-week low on Tuesday after a U.S. inflation report and the recent U.S. bank failures sparked fears of a fresh financial crisis that could reduce future oil demand.

Brent futures fell $2.53, or 3.1%, to $78.24 a barrel by 1:59 p.m. EDT (1759 GMT), while U.S. West Texas Intermediate (WTI) crude fell $2.48, or 3.35, to $72.32.

That pushed both contracts into technically oversold territory for the first time in weeks and puts Brent on track for its lowest close since Jan. 4 and WTI on track for its lowest close since Dec. 9.

 

 

STOCKS

 

 

S&P 500 jumps 1% as regional banks rebound: Live updates

 

 

U.S. stocks rallied Tuesday as investors bet the risk of contagion to banks following the closure of Silicon Valley Bank and Signature Bank has been contained.

The S&P 500 added 1.1%, while the Nasdaq Composite climbed 1.5%. The Dow Jones Industrial Average gained 153 points, or 0.5%, as the 30-stock index aimed to snap a five-day losing streak.

Bank stocks rebounded after getting pummeled during Monday’s trading session as investors grew increasingly optimistic that other banks would not face the same fate as Silicon Valley and Signature. Regulators said Sunday that they created a plan to backstop all depositors in the two banks.

The SPDR S&P Regional Banking ETF (KRE) rose 3% in Tuesday’s session following a 12% decline the day prior. Shares of First Republic Bank popped 30% after closing down nearly 62% on Monday. KeyCorp shares added 10% in a relief bounce following a 27% slide.

 

 

2-year Treasury yield rebounds after biggest 3-day slide since 1987

 

 

The yield on the 2-year Treasury note climbed on Tuesday, rebounding after posting its biggest three-day slide since 1987 as investors flocked to safety in the wake of Silicon Valley Bank’s collapse.

The 2-year Treasury was last at 4.317% after climbing nearly 29 basis points. It had declined by close to 59 basis points on Monday, notching the biggest three-day drop since the fallout from the October 1987 stock market crash. The yield on the 10-year Treasury was last up by more than 11 basis points to 3.628%.

Yields and prices move in opposite directions and one basis point equals 0.01%.

 

 

ANALYSIS

 

 

EUR/USD: Sustained break above 55-DMA at 1.0719 to boost near-term outlook – Scotiabank 

 

 

“Price patterns that developed around yesterday’s peak at 1.0749 suggest a top/reversal is in place (‘evening star’ reversal on the 6-hour candle chart).”

“The pair is running into broader resistance on the daily chart, defined by the 55-DMA (1.0719); spot closed just above this point yesterday but a more obvious and sustained break is needed to boost the EUR’s near-term outlook.”

“Intraday support is 1.0665 and (stronger) at 1.0650.”

 

 

CHART

 

 

EURUSD Short Term: Upside favored

 

 

Technical View: Long position above 1.0705. Target 1.0754. Conversely, break below 1.0705, to open 1.068.

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/sterling-rolls-off-one-month-high-against-dollar-2023-03-14/
https://www.cnbc.com/2023/03/14/gold-holds-above-1900-as-svb-collapse-fuels-fed-slowdown-hopes.html
https://www.reuters.com/business/energy/oil-prices-edge-lower-svb-collapse-spooks-financial-markets-2023-03-14/
https://www.cnbc.com/2023/03/13/stock-market-today-live-updates.html
https://www.cnbc.com/2023/03/14/us-treasury-yields-investors-await-key-consumer-inflation-data.html
https://www.fxstreet.com/news/eur-usd-sustained-break-above-55-dma-at-10719-to-boost-near-term-outlook-scotiabank-202303141151