Macro Roundup (Mar 20)

SHANGHAI, Mar 20 - This is a roundup of global macroeconomic news last Friday night and what is expected today.

The U.S. 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.

The dollar index, a measure of the dollar against six other currencies, fell 0.6%, while the euro was up 0.6% to $1.0671.

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 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.

U.S. stock futures rose on Sunday as the Swiss government engineered a forced takeover of Credit Suisse by UBS, marking the latest effort by governments around the world to stifle a crisis threatening the banking sector.

Despite the anxieties surrounding bank stocks, the S&P 500 and Nasdaq Composite closed higher for the week as investors rotated back into technology shares that could benefit from a lower interest rate environment. Meanwhile, the Dow declined 0.15% for the week.

Dow Jones Industrial Average futures rose by 118 points, or 0.3%. S&P 500 futures and Nasdaq-100 futures climbed 0.3%.

Investors remained on edge as the week’s trading began, with regional banks still under pressure to shore up their deposit bases in the wake of the collapse of Silicon Valley Bank earlier this month.

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 $1.59, or 2.1%, to $73.11 a barrel. U.S. West Texas Intermediate crude was down $1.43, or 2.1%, at $66.92.

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.

Gold prices surged Friday as a wave of banking crises shook markets in bullion’s biggest weekly rise in four months, while bets solidified for a less aggressive U.S. Federal Reserve in its fight against inflation.

Spot gold climbed 3.1% to $1,977.89 per ounce, its highest level since April 2022. Bullion has risen about 5.8% this week. U.S. gold futures gained 2.6% to settle at $1,973.50.

European stocks rounded off a turbulent week with a negative session on Friday, despite announcements that Credit Suisse and First Republic Bank would receive financial help designed to prevent a crisis in the banking sector.

The pan-European Stoxx 600 index closed 1.26% lower, taking losses for the week to 3.9% according to Eikon data, their worst performance since September 2022.