From Marc Chandler at Bannockburn Global Forex:
Overview: The pendulum of market psychology is swinging dramatically. Amid the US banking crisis, Credit Suisse's long-running pressures percolated back to top-of-mind, sending ripples through the capital markets, trigging a sharp slide in the euro. The SNB support is helping the markets calm today. The odds of a 50 bp hike by the ECB today have been cut to about 50% compared with a nearly 100% a week ago. The market has about a 66% chance of a 25 bp hike by the Fed next week discounted and about a 50% chance of a quarter-point move by the Bank of England priced into the overnight index swaps.
Asia Pacific equities continued the rout, while European stocks have stabilized, including the bank index. US equity futures are narrowly mixed. Benchmark 10-year bond yields are jumping back. European rates are up 8-15 bp and the peripheral premiums are falling. The 10-year US Treasury yield is up almost four basis points to 3.50%. The US two-year yield is up a dozen basis points to poke back above 4%. The US dollar is weaker against nearly all the G10 currencies, led by a rebounding Swiss franc (~0.6%). The notable exception is the New Zealand dollar, which was punished for a much weaker than expected Q4 GDP (-0.6%). Gold ran up a bit through $1937 yesterday and is consolidating today above $1900. May WTI is also stabilizing after falling to the lowest level since late 2021. Yesterday's low was a little below $66 and today's bounce has carried to back to almost $69. It finished last week slightly be $77.00....
....MUCH MORE
