The markets have been buzzing with intrigue, from the ECB's daring rate hike to a high-stakes intervention by major US banks. We'll also take a peek at gold's steady ascent and the struggling US Dollar.
Want to know more? Join us as we explore the latest market trends and insights 🚀
ECB hikes interest rate to 3.5% (+50 bps)
ECB raises interest rates by half-point, while promising support for eurozone banks, as it combats inflation without worsening financial strains.
This decision demonstrates the policy makers' attempt to address high inflation without exacerbating the financial system's current strains.
ECB President Christine Lagarde also indicated that the bank would be cautious about further rate hikes, while emphasizing its readiness to provide fresh liquidity to banks.
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US stocks rally after major banks intervene
In a surprising turn of events, 11 of the nation's biggest banks, including JPMorgan ($JPM), Citigroup ($C.N), Bank of America ($BAC), and Wells Fargo ($WFC), deposited $30 billion into First Republic Bank to alleviate the recent panic in the banking system.
The government confirmed the deal to rescue the San Francisco lender — one of the banks swept up in the contagion that followed last week’s collapse of Silicon Valley Bank — moments before the stock market closed.
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Gold climbs back closer to six-week high
Gold price regains some positive traction following the previous day's good two-way price moves and maintains its bid tone through the early European session on Friday.
The XAU/USD is currently placed just above the $1,930 level, up over 0.60% for the day, and remains well within the striking distance of a six-week high touched on Monday.
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US Dollar struggles to find demand
The US Dollar Index stays deep in negative territory slightly below 104.00 while the 10-year US T-bond yield fluctuates above 3.5%.
US Dollar struggles to find demand. Economists at MUFG Bank expect the greenback to remain under pressure if the Federal Reserve hikes by 25 basis points next week.
As the market mood continues to improve on easing concerns over a deepening financial crisis toward the end of the week, the US Dollar is having a tough time staying resilient against its major rivals.
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This concludes our weekly recap. Have a great weekend and see you next week! 👋
