Oil prices rise $1/bbl on Kurdish supply risks and banking relief

“Remember, today is the tomorrow you worried about yesterday.” —Dale Carnegie 

 

 

HEADLINES

 

 

• Sterling edges up as BoE says no tension in UK banking system
• Gold rises on dollar dip, banking optimism limits gains
• Oil prices rise $1/bbl on Kurdish supply risks and banking relief
• Wall St mixed as banking worries ebb, Treasury yields rise
• 2-year Treasury yield rises back above 4%, recovering from bank crisis dip
• USD/CAD: Loonie is unlikely to fall too far at the moment – Scotiabank
• AUDUSD Near Term: Upside favored

 

 

Sterling edges up as BoE says no tension in UK banking system

 

 

Sterling hovered around a two-month high on Tuesday as the Bank of England (BoE) said Britain was not experiencing stress linked to the demise of Silicon Valley Bank (SVB) and Credit Suisse.

Markets have been roiled in recent weeks by the collapse of U.S. technology lender SVB [RIC:RIC:SIVBV.UL], followed by the failures of other U.S. regional lenders and the emergency rescue of Swiss lender Credit Suisse (CSGN.S) by rival UBS (UBSG.S).

Risk-sensitive sterling rose 0.2% against the U.S. dollar at $1.2313, not far from an almost two-month high touched on Thursday. Against the euro, sterling edged 0.1% lower to 87.91 pence per euro.

 

 

COMMODITIES

 

 

Gold rises on dollar dip, banking optimism limits gains

 

 

Gold prices rose on Tuesday, drawing support from a weaker U.S. dollar even as higher bond yields and easing worries about a full-blown banking crisis limited gains for the safe-haven asset.

Following two sessions of declines, spot gold gained 0.7% to $1,970.88 per ounce by 1:40 p.m. EDT (1740 GMT). U.S. gold futures settled 1% higher at $1,973.50.

The U.S. dollar index retreated about 0.4%, making the greenback-denominated precious metal less expensive for holders of other currencies.

 

 

ENERGY

 

 

Oil prices rise $1/bbl on Kurdish supply risks and banking relief

 

 

Crude prices rose about $1 a barrel on Tuesday, extending sharp gains from the previous session on supply disruption risks from Iraqi Kurdistan and hopes that banking sector turmoil is contained.

Brent crude futures gained $1, or 1.3%, to $79.12 a barrel. West Texas Intermediate U.S. crude was up $1.01, or 1.4%, at $73.83.

Prices rallied more than $3 on Monday after Iraq was forced to halt exports of about 450,000 barrels per day (bpd) from its northern Kurdistan region through Turkey after an arbitration decision confirmed Baghdad’s consent was needed to ship the oil.

Barclays said any protracted outage of Kurdish exports until the end of the year would imply a $3 a barrel upside to the bank’s $92 a barrel Brent price forecast for 2023.

 

 

STOCKS

 

 

Wall St mixed as banking worries ebb, Treasury yields rise

 

 

Wall Street struggled for direction on Tuesday as investors weighed receding concerns about a banking crisis, while Treasury yields rose amid focus on Federal Reserve's interest rate trajectory.

Growth stocks such as Microsoft Corp (MSFT.O), Alphabet Inc (GOOGL.O), Apple Inc (AAPL.O) and Tesla Inc (TSLA.O) remained under pressure, falling between 0.8% and 1.5% as yields rose.

Money market bets are now split between the Fed raising interest rates by 25 basis points and a pause in its policy meeting in May, after being largely tilted towards a no-hike scenario at the end of last week. Investors expect a sharp easing in rates thereafter.

 

 

2-year Treasury yield rises back above 4%, recovering from bank crisis dip

 

 

U.S Treasury yields climbed on Tuesday as fears of a crisis in the banking sector were assuaged and investors assessed what could be on the horizon for the U.S. economy and Federal reserve policy decisions.

The yield on the 10-year Treasury was trading at 3.564% after rising 3 basis points. The yield on the 2-year Treasury was 8 basis points higher at 4.047%.

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

 

 

ANALYSIS

 

 

USD/CAD: Loonie is unlikely to fall too far at the moment – Scotiabank 

 

 

“Material gains in the CAD still look a struggle but I also feel that the CAD is unlikely to fall too far at the moment, with a lot of bad news already factored in.”

“While the CAD is finding it very hard to make material gains, the pattern of short-term trade since mid-March has been one of (very) mild improvement in the CAD tone. Still, broader range trading seems likely to persist for now.”

“Support is 1.3625/30. Resistance is 1.3725/50.”

 

 

CHART

 

 

AUDUSD Near Term: Upside favored

 

 

Technical View: Long position above 0.6685. Target 0.6722. Conversely, break below 0.6685, to open 0.6668.

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-edges-up-boe-says-no-tension-uk-banking-system-2023-03-28/
https://www.reuters.com/markets/commodities/softer-dollar-buoys-gold-banking-optimism-limits-safe-haven-appeal-2023-03-28/
https://www.cnbc.com/2023/03/28/oil-prices-soften-banking-crisis-and-chinese-demand-in-focus.html
https://www.reuters.com/markets/us/futures-muted-yields-rise-amid-easing-bank-contagion-fears-2023-03-28/
https://www.cnbc.com/2023/03/28/us-treasury-yields-investors-consider-economic-outlook.html
https://www.fxstreet.com/news/usd-cad-loonie-is-unlikely-to-fall-too-far-at-the-moment-scotiabank-202303281149