The FP Markets research team produce First Light News during the early hours of the European session, ensuring traders and investors have the news needed to begin their day.

Good morning.

Fears across the banking sector receded on Monday after First Citizens BancShares (FCNCA) announced it would purchase failed Silicon Valley Bank and receive a $70-billion line of credit from the Federal Deposit Insurance Corporation (FDIC). FCNCA, as evident from the daily chart below, finished the session an eye-popping 53.7% higher.

(Chart: TradingView)

Global equity indices and yields largely ended the session on the front foot. The S&P 500 gained 6 points (+0.2%) to 3,977, and the Dow jumped 194 points (+0.6%) to 32,432, while the Nasdaq 100 shed 93 points (-0.7%) to 12,673. Oil prices surged over 5.0%, leading to outperformance across the energy sector, up 2.1%. Financial stocks also outperformed, adding 1.4%. FAANG stocks, however, ended lower across the board. Meta Platforms (META), Amazon (AMZN), Apple (APPL), Netflix (NFLX) and Alphabet (GOOGL) fell 1.5%, 0.1%, 1.3%, 0.2% and 2.8%, respectively.

US government Treasury yields bear flattened on the back of banking sector optimism. The 2-year US Treasury yield advanced 20 basis points to touch 4.00%, and the benchmark 10-year US Treasury yield—which notably made its way back above its 200-day simple moving average—gained 15 basis points to test 3.53%.

Regarding economic data, Germany’s IFO survey for March printed its sixth consecutive increase with a release of 93.3, up from 91.1 in February. The Bank of England (BoE) Governor Bailey was also out and about on Monday, speaking at the London School of Economics. Bailey reaffirmed that the central bank’s fight to curb inflation remains front and centre, and the banking system concerns will not influence this. Overall, GBP/USD settled higher and reclaimed Friday’s downside move. The full speech can be found here.

Markets Today

Asia Pac equities were modestly underpinned in overnight trading amid decreased banking uncertainties. The Nikkei 225 eked out modest gains (+0.2%), with South Korea’s KOSPI and Australia’s ASX 200 outperforming, gaining 1.1% and 1.0%, respectively. This morning, European equity indexes are positive, in line with US equity index futures.

In FX, procyclical currencies are bid while the US Dollar Index pursues deeper waters (-0.2%) under 103.00; safe-haven currencies are also mixed. In the commodities space, spot gold (XAU/USD) is subdued (-0.2%), and spot silver (XAG/USD) is 0.6% lower, touching $23.93. WTI oil is indecisive at the time of writing, following yesterday’s one-sided push north that added 5.2% and lifted price action to within striking distance of its 20-day simple moving average. Finally, Bitcoin against the US dollar (BTC/USD) fell 3.0% in recent trading, shaking hands with lows of $26,525.

Headline Events for the Day Ahead:

BoE Governor Bailey Speaks at 9:45 am GMT+1.

US (Conference Board) Consumer Confidence for March at 3:00 pm GMT+1 (Expected: 101.0; Previous: 102.9).

Richmond Manufacturing Index for March at 3:00 pm GMT+1 (Expected: -10; Previous: -16).

Chart of the Day

Following a fresh lower low at 6,895.0 on 20 March, a move which pierced the 6,905.3 3 January low, price action on the daily timeframe of the ASX 200 (XJO) has been busy carving out an AB=CD bearish pattern, with its PRZ (Potential Reversal Zone) marked by a 100% projection at 7,060.5. Also of technical relevance is the neighbouring 38.2% Fibonacci retracement ratio at 7,076.9.

(Chart: TradingView)

Major Currency Markets as of 8:15 am GMT:

(Chart: TradingView)

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