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Market Update – March 21 – Sentiment Stabilised?


Trading Leveraged Products is risky

Risk appetite improved to kick off spring. Though banking jitters are still an undercurrent, the various rescue measures, including UBS’s takeover of Credit Suisse over the weekend, helped ease global tensions. Trading in Japan is closed for a public holiday. European and US Stocks are extending gains for now, as US Dollar steadied at 103.

Confirmation from European officials that equities will take losses before risky bonds, which helped AT1 bond markets in Asia to recover. Speculation that the US could temporarily agree to guarantee all bank deposits if the financial crisis expands also helped!

  • RBA comments showed that the bank will consider a pause in the tightening cycle at the next meeting.
  • ECB: ECB’s de Cos won’t validate bets of 3.25% peak deposit rate. In the light of recent financial market jitters and after cautious comments on the situation from Lagarde markets have lowered expectations for the peak deposit rate to 3.25%, which would be just one additional 25 bp hike. ECB’s Kasaks suggested more rate hikes underway, if things stabilise.
  • FXUSDIndex is slightly higher at 103.10 today. EUR slightly lower to 1.0712 but still in an upchannel. JPY above PP at 131.72. Sterling holds gains above 1.2250. AUD extended losses to 0.6675
  • Stocks – USA100 advanced 0.39%, the US500 up 0.89%, amid broadbased gains, and the USA30 rallied 1.2%. ASX moved up 0.8%, while Hang Seng and CSI300 gained 0.9 so far. Amazon fell 1.8% after announcement for another 9,000 layoffs (so far 9% of its workforce). Google (-0.52%) suspends China’s Pinduoduo app due to malware issues. NYCB (+30%) surge after Signature deal. Pimco & Invesco face losses as the 2 biggest AT1 Bond holders of Credit Suisse.
  • First Republic Bank posted further declines on top of the -80% plunge the prior two weeks, following a second downgrade from S&P.
  • Commodities – USOil – continues to struggle but recoved from $64 lows to $67.24 now.
  • Gold – has been a major beneficiary from the fallout, though it is a bit lower today, down -0.9% to $1971, after surging to $2,009.73. It has not closed with a $2,000 handle since March 8, 2022. 
  • Cryptocurrencies BTC reversed from $28.4K highs. Currently at $27.2K.

Today ECB Lagarde speech, Canadian Inflation & US Existing Home Sales.

Biggest FX Mover @ (07:30 GMT) NZDUSD(-55%). Retest 0.6200 floor! MA’s flattened, MACD histogram & signal line remain negative, RSI 35, H1 ATR 0.0009, Daily ATR 48.4.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Having completed her five-year-long studies in the UK, Andria Pichidi has been awarded a BSc in Mathematics and Physics from the University of Bath and a MSc degree in Mathematics, while she holds a postgraduate diploma (PGdip) in Actuarial Science from the University of Leicester.

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