Macro Roundup (Mar 14)

SHANGHAI, Mar 14 - This is a roundup of global macroeconomic news last night and what is expected today.

The U.S. dollar fell on Monday as markets bet the Federal Reserve will be less aggressive in raising interest rates to curb inflation after U.S. authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank.

The dollar was down 1.25% to the yen at 133.29 and fell 1.09% against the Swiss franc at 0.9112.

President Joe Biden said the administration’s swift actions on Sunday to ensure depositors can access their funds in SVB and Signature Bank should give Americans confidence that the U.S. banking system was safe.

If concerns over the U.S. banking system are contained and do not spread, expectations for rate hikes should be revived quickly.

U.S. stock futures rose on Monday night after the Dow Jones Industrial Average notched a fifth day of losses. Traders also looked ahead to a key inflation report due Tuesday.

Dow Jones Industrial Average futures rose by 79 points, or 0.25%. S&P 500 and Nasdaq 100 futures climbed 0.20% and 0.21%, respectively.

On Monday, the Dow Jones Industrial Average fell after a plan to backstop depositors in Silicon Valley Bank failed to buoy bank stocks, as well as the S&P 500. The Dow lost 90.50 points, or 0.28%, while the broad-market index lost 0.15%.

On the other hand, the tech-heavy Nasdaq Composite bucked the trend, rising 0.45%, as some investors bet the collapse at Silicon Valley Bank could mean a pause in future interest rate hikes from the Federal Reserve.

Oil prices fell over 2% in volatile trading on Monday as the collapse of Silicon Valley Bank roiled equities markets and raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support.

Brent crude futures settled down $2.01, or 2.4%, to $80.77. The global benchmark earlier fell to a session low of $78.34, its lowest price since early January.

Gold and silver prices surged on Monday, as their safe-haven appeal drew in investors spooked by the collapse of Silicon Valley Bank, with the crisis also sparking hopes the U.S. Federal Reserve would have to slam the brakes on its aggressive monetary policy.   

Spot gold last jumped 2.44% to $1,921.63 per ounce, the highest since early February. U.S. gold futures gained 2.6% to settle at $1,916.50.

European markets closed sharply lower Monday as the fallout from the Silicon Valley Bank collapse sent banks to their worst day in more than a year.

The pan-European Stoxx 600 index provisionally closed down 2.34%. Bank fell 5.65%, their worst day since March 4, 2022 according to Eikon data, when they fell 6.66% on warnings their asset quality would be impacted by the Ukraine war.