Here is what you need to know on Monday, March 20:
Financial markets started the new week on a cautious note despite the weekend's encouraging headlines regarding the global liquidity issues. Eurostat will release January Trade Balance data later in the session and Germany's Bundesbank will publish its monthly report. European Central Bank (ECB) President Christine Lagarde will testify before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament in Brussels at 14 GMT.
Late Sunday, Swiss authorities persuaded UBS Group AG to buy Credit Suisse Group AG in the next step to try and stop the spread of the banking crisis. UBS will reportedly pay $3.23 billion for Credit Suisse and assume up to $5.4 billion in losses in a deal that is expected to close by the end of 2023.
Meanwhile, the Federal Reserve (Fed) announced that it will offer daily swaps to the Bank of Canada (BoC), the Bank of Japan (BoJ), the Swiss National Bank (SNB) and the European Central Bank (ECB) to ensure they have enough liquidity to continue operations. "The network of swap lines among these central banks is a set of available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets," the Fed said in a statement published on Sunday.
Despite these developments, US stock index futures were last seen losing between 0.7% and 1% on the day. The benchmark 10-year US Treasury bond yield is down more than 3% on the day at 3.3% and the US Dollar Index trades modestly lower on the day below 104.00.
Although EUR/USD opened with a bullish gap and rose above 1.0700 to start the week, it lost its traction and retreated toward 1.0650 in the early European morning. The data from Germany revealed that the Producer Price Index (PPI) declined by 0.3% on a monthly basis in February following January's 1.2% decrease.
GBP/USD touched its highest level since mid-February above 1.2220 in the Asian session on Monday. The pair, however, reversed its direction and declined below 1.2200, retracing the majority of its daily gains in the process.
Following Friday's impressive upsurge, Gold price continues to push higher early Monday amid falling global yields. As of writing, XAU/USD was trading at its highest level since April slightly above $1,990.
With the Japanese Yen benefiting from souring market mood, USD/JPY came under bearish pressure and was last seen trading deep in negative territory at around 131.00.
Bitcoin extended its rally over the weekend and advanced beyond $28,000 for the first time since June. Early Monday, BTC/USD is staging a downward correction and was last seen losing 1% on the day at $27,800. Despite having struggled to find direction over the weekend, Ethereum gained more than 10% last week. ETH/USD stays relatively quiet early Monday and fluctuates at around $1,770.
Week ahead: March Mayhem continues with Fed, but cryptos emerge victorious
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops toward 1.0650 ahead of German inflation data
EUR/USD is falling toward 1.0650 in European trading. Dismal China's Manufacturing PMI and pre-US debt deal vote anxiety support the safe-haven US Dollar while markets pare ECB rate hike bets after softer French inflation data. German inflation data, Fedspeak and US House vote eyed.
GBP/USD extends losses toward 1.2350 amid firmer US Dollar
GBP/USD is extending losses toward 1.2350 in the European session. Markets stay jittery amid China growth worries and ahead of the US House vote on the debt deal. Hawkish Fed's Mester underpins the ongoing US Dollar upsurge. More Fedspeak in focus.
Gold price rebound eyes $1,990 and US factors
Gold Price picks up bids to refresh intraday high as buyers cheer a two-day winning streak, after refreshing the lowest levels in 10 weeks. In doing so, the XAU/USD fails to justify the latest rebound in the DXY but aptly cheers the downbeat Treasury bond yields.
BTC bulls recovery plan targets $30,000 as bears exhaust
Bitcoin action slows down, allowing bears to doubt their strength. As more time elapses, the chances of bulls taking over control of BTC become more likely. A spillover effect would be noticeable in Ethereum and Ripple prices.
Risk off flow into month end
We had warned against the market wanting to get overly excited about the news of a US debt ceiling deal that was always going to get done. And now that this reality is coming to fruition, it’s back to focusing on the market drivers where investors need to focus.