Daily BriefsMacro

Daily Brief Macro: Bond Market Monitor: A Contempt Against Depositors and more

In today’s briefing:

  • Bond Market Monitor: A Contempt Against Depositors
  • Fixed Income Watch: Zooming in on the Curve Steepening
  • CX Daily: Solving China’s Soaring Youth Unemployment
  • ECB: Delivering the Required Hikes

Bond Market Monitor: A Contempt Against Depositors

By Warut Promboon

  • FDIC’s decision to put Svb Financial (SIVB US) and Signature Bank (SBNY US) under receivership created the worldwide market panic.
  • We believe the contagion will be limited to US regional banks which could see rising funding costs and a deposit flight to larger US banks.
  • The Fed’s multiple rate hikes in 2022 have finally broken the US regional banks and we expect this event to slow down the rate hikes even further.

Fixed Income Watch: Zooming in on the Curve Steepening

By Andreas Steno

  • In general over a 1 year time frame short DXY looks good once the curve is steep
  • Especially commodity heavy currencies have a high beta to the dollar scrambles.
  • Tech/Consumer Discretionary is probably where you should place your chips, if you are a long only manager given this backdrop.

CX Daily: Solving China’s Soaring Youth Unemployment

By Caixin Global

  • Unemployment / In Depth: Solving China’s soaring youth unemployment

  • Politics / Communist Party rejigs human resources body leadership

  • Fine / Bohai Bank slapped with $2.5 million fine for 12 violations


ECB: Delivering the Required Hikes

By Phil Rush

  • The ECB delivered another 50bps rate hike, as promised in February and expected. It is not allowing Silicon Valley Bank’s broadly irrelevant failure to break its focus.
  • Higher core inflation forecasts extend the problem and necessitate a tight monetary setting to break excessive pressures. ECB policy will rightly be data-dependent.
  • We forecast 25bp deposit rate hikes in May and June, with risks skewed towards further steps if resilience outlives the current financial stability issues.

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