May kicked off with another bank failure, the fourth in two months, as First Republic Bank (FRC) was seized by the FDIC, after which the assets were purchased by JPMorgan Chase. FRC became the second largest bank in US history to go under, ignominiously taking over that mantle from SVB. Morgan Stanley plans to cut 3,000 jobs due to a dealmaking slowdown by the end of June. RBA hiked its cash rate by 25 bps to 3.850%, surprising many forecasters expecting a third straight pause.
Treasury yields closed sharply higher on inflation data and a pick up in Fed fears, a hefty corporate calendar, and upward revisions to Q2 borrowing estimates. US manufacturing sector enters longest contractionary streak since 2009. Stock markets remain choppy in search of direction.
- FX – USDIndex kicked 102.03 in the morning but currently turned lower. USDJPY keep extending gains for the 4th day to 137.70, amid market uncertainty.
- Stocks – The US30 lost -0.14%, while the US500 and US100 were -0.04% and -0.11% lower, respectively. The Nikkei and Hang Seng managed slight gains. #Amazon -3.22%, #Tesla -1.35%, #JPM +2.14%, #Meta +1.19%.
- Commodities – USOil fell to $74.35 as weak economic data from China and expectations of a US interest rate increase weigh on the market.
- Gold – at $1983 after tumbling to $1979 from $2007 yesterday.
- Cryptocurrencies – BTC down to $2774.
Today – EU HICP and US Factory orders. Biggest FX Mover @ (06:30 GMT) AUDUSD (+1.09%) spiked by more than 85 pips the past 2 hours. MAs keep rising, MACD histogram & signal line rising, Stochastics at 95 and points higher, all indicating further nearterm positive bias.