From Marc to Market:
Overview: The unexpectedly large rise in US weekly jobless claims, the largest since the end of last September and concerns about the impact of the sharp rise in interest rates on the liquidity and value of assets (bonds) owned by small and medium-sized banks saw the market unwind the effect of Fed Chair Powell's comments. The yield on the US two-year note slumped almost 20 bp to 4.87% yesterday and fell to 4.75% today before stabilizing (~4.82%). It settled near 4.89% Monday, the day before Powell's testimony began.
The sell-off of US bank stocks and the broad decline in US equities drove down global markets today. In the Asia Pacific region, Hong Kong led the decline with a 3% sell-off and the index of mainland shares that trade in HK was also off by 3%. Europe's Stoxx 600 is down by almost 1.6% to rival its biggest loss of the year. US equity futures are nursing small losses. Safe haven buying of bonds is driving down yields. European benchmark 10-year yields are off 3-9 bp. Falling rates often seem to coincide with smaller premium in the periphery, but not today as spreads are widening a few basis points. Gold is extended yesterday's gains to test the $1837 area. April WTI that had pushed above $80 at the start of the week is set new lows since the end of February today below $75....
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