Financial sector uncertainty remains ahead of the weekend
|General trend
- US banks’ emergency borrowing from the Fed still elevated (see below); Weekly borrowing from the FHLB declined.
- Generally quiet FX session seen; Yen higher amid safe haven demand.
- Was the Aussie PMI data impacted by recent banking industry developments?
- Equity markets trade generally lower after US markets lost momentum; Modest moves seen.
- Financials decline.
- Local governments in China announce measures to support the auto industry amid recent price war.
- CN/HK corporate earnings due today include [BAIC Motor, China Everbright Bank, China Merchants Bank, China Resources Beer, Meituan, Sinopec].
Headlines/economic data
Australia/New Zealand
-(AU) ASX 200 opens -0.3% at 6,945.
-*(AU) Australia Mar preliminary PMI manufacturing: 48.7 V 50.5 PRIOR (1st contraction in 35 months, lowest since May 2020).
-(AU) Australia sells A$500M v A$500M indicated in 4.25% Apr 2026 bonds; Avg Yield: 2.8595%; bid-to-cover: 4.97x.
-(NZ) New Zealand Ministry: Economy may have contracted in Q1, cites cyclone [implies technical recession].
China/Hong Kong
-Hang Seng opens -0.6% at 19,919.
-Shanghai Composite opens -0.1% at 3,282.
-(CN) China Wuhan Economic & Development Investment establishes CNY50B ($7.3B) auto fund - financial press.
-(CN) China PBOC Open Market Operation (OMO): Sells CNY7.0B v CNY64B prior in 7-day reverse repos: Net drain CNY173B v drains CNY45B prior.
-(CN) China PBOC sets Yuan reference rate: 6.8374 v 6.8709 prior [strongest CNY fix since Feb 15th].
-(CN) China reportedly launched stress test into securities firms - press.
-(CN) Mintz Group's [US corporate due diligence firm] office in Beijing was raided; 5 China staff members were detained - financial press.
-(HK) Hong Kong Monetary Authority (HKMA): Need to monitor situation carefully for any further volatility; HK does not have any 'direct' exposure to AT1 bonds.
-HSBC: China Banking and Insurance Regulatory Commission (CBIRC) Chairman met with the co's CEO, the regulator welcomes HSBC to expand investment in China.
Japan
-Nikkei 225 opens -0.2% at 27,368.
-*(JP) Japan Feb national CPI Y/Y: 3.3% V 3.3%E; CPI ex-fresh food (core) Y/Y: 3.1% V 3.1%E; CPI ex-fresh food/energy (Core-Core) Y/Y: 3.5% v 3.4%e [fastest pace since Jan 1982].
-*(JP) Japan Mar preliminary PMI manufacturing: 48.6 V 47.7 prior [5th straight contraction].
-(JP) Japan releases weekly flows data [period ended Mar 17th]: Japan buying of foreign bonds +¥3.3T; Foreign buying of Japan bonds: +¥4.1T [Japan sees record weekly foreign inflow].
-(JP) Japan Fin Min Suzuki: Confirms to use >¥2.0T in COVID reserves on price measures.
Korea
-Kospi opens -0.1% at 2,421.
-(KR) South Korea Finance Min Choo: Seeks to expand flights between South Korea and Japan.
Other Asia
-*(TW) Taiwan Central Bank (CBC) raises benchmark interest rate by 12.5bps to 1.875%; not expected.
North America
- (US) Fed releases factors affecting reserve balances (H.4.1): Discount window borrowing declined to $110.2B v $152.9B w/w; Banks have borrowed $53.6B v $11.9B w/w from new BTFP facility.
-SVB Financial: Citizens Financial said to prepare bid for co's private banking unit; Customers Bancorp said to consider bid for Silicon Valley Bank - financial press.
-(US) Treasury Sec Yellen: Not job of treasury to be overseeing bank supervisors at Fed or FDIC; There are tools that we could use again, for an institution of any size.
-(US) Treasury Sec Yellen: Prepared for additional deposit actions if warranted, important anti-contagion tools can be used again - House testimony.
- Reportedly JPM and Citi tell staff not to solicit clients from vulnerable banks - press.
Europe
-ECB and SNB tapped Fed's USD swap facility in the week through March 22nd.
-(EU) ECB: Likely to increase scrutiny of bank funding including clarity on deposit stickiness.
Levels as of 01:20 ET
- Nikkei 225, -0.3%, ASX 200 -0.2% , Hang Seng -0.4%; Shanghai Composite -0.5%; Kospi -0.5%.
- Equity S&P500 Futures: +0.2%; Nasdaq100 +0.1%, Dax -0.5%; FTSE100 -0.7%.
- EUR 1.0838-1.0817 ; JPY 130.94-130.05 ; AUD 0.6689-0.6659 ;NZD 0.6255-0.6228.
- Gold -0.1% at $1,994/oz; Crude Oil -0.2% at $69.81/brl; Copper +0.5% at $4.1245/lb.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.