Image Source: Pixabay
 

Banking Blowups & Bailouts

Asian markets have posted modest gains overnight as news out of the UK that SBV UK will be acquired by HSBC for £1, shoring up the beleaguered subsidiary of SBV US, who have now been officially backstopped by the FDIC, this comes in light of another US lender Signature Bank also requiring government support, official announcements have confirmed that depositors in both institutions will be made whole at the open Monday, the weekend bailouts have seen US equity futures soar recovering over 1.5% on the overnight session erasing much of Friday’s losses. Goldman Sachs now believes that the Fed’s hands are tied by the banking system's stress as such they do not see the FOMC raising rates at the March 22nd meeting this has led to an uptick in bonds overnight weighing on yields with the 2yr US yields dropping back below 4.5%. The move by US regulators is seen as an urgent and significant defense of the banking system alleviating some of the concerns last seen during the GFC, the weekend moves by bankers and regulators do however bring back memories of the frantic weekend responses required during that period to provide market liquidity and security.

With a distinct lack of tier-one data on the docket for both the European and US sessions, investor focus will shift to tomorrow's US CPI data, however, this release may have lost some of its significance given the banking system stress witnessed over the weekend, as the Fed’s focus on fighting inflation has shifted to firefighting systemic stress. US core inflation is expected to print a circa 4% gain month on month, broadly in line with the January levels, the annual read is expected to show a modest retreat to 5.5% down from 5.6%. For the remainder of the week in the European sessions, we will see Eurozone inflation releases coupled with industrial production data, in the UK employment prints are due tomorrow, with markets poised for the potential of a loosening in conditions, with the unemployment rate expected to show a modest uptick to 3.8%, which in turn should feed through to a mild retreat in headline wage growth, pulling back from 5.9% to 5.7%. Uk investors will then focus on Wednesday’s Spring Budget statement by Chancellor Hunt, which represents the third fiscal statement since September by the UK government, with investors anticipating far fewer fireworks than those seen post the September announcement!
 

FX Options 

• Option implied volatility is an indicator of actual volatility expectations
• All expiry dates have rallied hard and warn against any complacency
• Overnight expiry gets U.S. CPI Tuesday and is above pre NFP levels
• One-week and 1-month expiries in most pairs open at new recent highs Monday
• Plenty of near term data risk with more focus on Mar 22 Fed after yields fall
• Interest rate markets price just 20bps Fed hike from 38bps pre NFP
• Source: Reuters
   

Overnight News of Note

• Silicon Valley Bank Deposits To Be Available Monday, US Officials Say
• Silicon Valley Bank UK Subsidiary Has Been Sold To HSBC For £1
• Fed Bets Pared As Goldman Scraps March Hike Call On Flaring Risk
• US Backstops Bank Deposits To Avert Crisis After SVB Collapse
• Gundlach: Curve Steepening Post Inversion Suggestive Of Imminent Recession
• UK Plans £11 Billion Full Expensing Business Tax Break In Budget
• Xi Retains China’s Central Bank Head In Boost To Markets
• BoJ Pivot Pressure To Ease As SVB Collapse Drags US Yields Lower
• Investors Call Time On Australian Rate Hikes In Wake Of SVB
• US Dollar Falls Sharply As US Intervenes On SVB Collapse
• BTC Jumps Most In Almost A Month As US Supports Banking Sector
• Circle Assures Market After Stablecoin USDC Breaks Dollar Peg
• Oil Fluctuates As US Seeks To Calm Markets After Banking Turmoil
• S&P Futures Rally On SVB Backstop As Rate Bets Rapidly Shift
• British Banks In Talks Over Rescue Plan For SVB UK’s Depositors

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4015

• Primary support is 3845
• Primary objective is 4384
• Below 3840 opens 3802
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearish below 1.0610

• Primary resistance is 1.0805
• Primary objective is 1.0430
• Above 1.0805 opens 1.0925
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish below 1.20

• Primary resistance  is 1.2265
• Primary objective 1.1785
• Above 1.2265 opens 1.2337
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bias: Intraday Bullish above Bearish Below 135.50

• Primary support  is 133.50
• Primary objective is 138.99
• Below 133.40 opens 132.80
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

AUDUSD Bias: Intraday Bullish Above Bearish below .6696 

• Primary resistance is .7030
• Primary objective is .6541
• Above .7050 opens .7150
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 21400

• Primary resistance 23000
• Primary objective is 18400
• Above 23300 opens 2500
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

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