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US futures waver, bonds gain as bank angst lingers: Markets wrap

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By sanjeevrana02


(Bloomberg) — U.S. equity-index futures were steady on Friday and Treasuries posted gains, capping a tumultuous week for global markets, amid concerns that the financial turmoil won’t outpace bonds and stocks. Have done

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Contracts on the S&P 500 edged higher yesterday after the index climbed 1.8% as big banks gave a lifeline to First Republic Bank, the latest US lender to signal stress. That didn’t stop First Republic’s shares from sliding in pre-market trading, however. Futures on the Nasdaq 100 were flat as the rate-sensitive gauge headed for its best week since November amid expectations the Federal Reserve would ease its tightening path. The 10-year Treasury yield declined and the dollar gauge declined.

Banks including JPMorgan Chase & Co and Citigroup came together in support of First Republic on Thursday. While the rescue effort helped boost sentiment, billionaire investor Bill Ackman was among those questioning whether it would be enough to stop the crisis. Meanwhile, US banks borrowed a combined $164.8 billion from the two Federal Reserve backstop facilities in recent weeks, indicating heightened funding stress following the Silicon Valley Bank failure.

“ do not expect a full-blown financial crisis, but the underlying dynamics should not be dismissed,” said Carsten Junius, chief economist at Bank J Safra Saracin AG. “Financial conditions are likely to tighten further and increase recession risks. We therefore advocate a defensive position with respect to risk assets and a strategically cautious stance on the banking sector, even if the constructive case for banks is moderate to remain intact for a long time.

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The Stoxx Europe 600 index advanced nearly 1%. An index of European banking shares climbed but is still down more than 7% this week after the Swiss Central Bank backed Credit Suisse Group AG. Shares of the troubled Swiss lender were steady on Friday as the idea of ​​a forced combination with a larger rival, UBS Group AG, was shot down. Bonds rose across Europe, with Germany’s 10-year yield falling four basis points.

Markets were also digesting a 50 basis point hike by the European Central Bank and comments from the ECB president that inflation is projected to remain very high for a very long time. The Federal Reserve’s bets on an ECB rate hike will also increase next week.

Indices gained in Hong Kong, Japan and Australia amid gains in banking stocks. Nevertheless, an Asia equity gauge was set for a second weekly loss following recent turmoil in the banking sector.

Friday’s quarterly triple witching, where contracts for index futures, equity index options and stock options all expire, can exacerbate swings in trading.

BlackRock Investment Institute does not expect cracks in the financial sector to prevent central banks from raising rates to curb inflation. A team of BlackRock analysts wrote in a note that it expects both the ECB and the Fed to “increase their inflation-fighting operations to the extent possible with measures to address bank troubles and safeguard the financial system.” Proceed to detach”.

In China, traders were able to access widely used bond price feeds again, as the $21 trillion market surged after an abrupt suspension of data earlier in the week.

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Bitcoin edged closer to its highest level since June amid a broader rally in the cryptocurrency. Other coins such as Ether, Solana and Polkadot also gained.

Elsewhere, oil advanced but was still heading for its worst week so far this year. Gold Rose.

These are the main market moves:

shares

  • The Stoxx Europe 600 was up 0.9% as of 8:50 a.m. London time

  • S&P 500 futures rose 0.2%

  • Nasdaq 100 futures rose 0.2%

  • Futures on the Dow Jones Industrial Average rose 0.1%

  • MSCI index rose 1.4%

  • MSCI rose 1.4%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.3%

  • The euro rose 0.4% to $1.0657

  • The Japanese yen rose 0.5% to 133.13 per dollar

  • The offshore yuan rose 0.3% to 6.8769 per dollar

  • The British pound rose 0.3% to $1.2144

cryptocurrency

  • Bitcoin rose 5.3% to $26,061.95

  • Ether rose 3.4% to $1,715.71

bond

  • The yield on the 10-year Treasury declined three basis points to 3.54%

  • Germany’s 10-year yield fell two basis points to 2.27%

  • UK 10-year yield fell three basis points to 3.40%

Goods

  • Brent crude rose 1% to $75.41 a barrel

  • Spot gold rose 0.5% to $1,929.70 an ounce

This story was produced with assistance from Bloomberg Automation.

– With assistance from Carly Vana and Angel Adegbeson.

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