DXY was flat last night:
AUD took off:
Oil firmed. Gold eased:
Dirt was soft:
Miners fell:
EM and junk popped:
Yields jacknifed:
Stocks to the moon:
No point pulling your dough from a US regional now. The big banks will just stick straight back in:
The US’s biggest banks agreed to deposit $30 billion with First Republic Bank in an effort to stem the turmoil that’s sent depositors fleeing from regional banks and shaken the country’s financial system.
JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. will contribute $5 billion of uninsured deposits each, while Goldman Sachs Group Inc. and Morgan Stanley will kick in $2.5 billion apiece, according to a statement Thursday. Other banks will deposit smaller amounts.
Clever. Though, does one deposit, in one bank, a summer make?
Meanwhile, in Europe the ECB marches on:
Inflation is projected to remain too high for too long. Therefore, the Governing Council today decided to increase the three key ECB interest rates by 50 basis points, in line with its determination to ensure the timely return of inflation to the 2% medium-term target. The elevated level of uncertainty reinforces the importance of a data-dependent approach to the Governing Council’s policy rate decisions, which will be determined by its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission.
And Fed fund futures are now pricing 25bps from the Fed next week again.
For me, all of this is beside the point. The key is now this:
The DM credit crunch has begun, such as it is, and recession will follow as night follows day. Even as central banks keep hiking.
This is not “risk” or AUD positive.
