The purchase of loans and deposits by First Citizens Bank of Silicon Valley Bank (SVB), which started the banking crisis in the USA, strengthened the expectations that the worst of the crisis may be behind.
Making statements yesterday, US Federal Reserve (Fed) Vice President for Financial Institutions Michael Barr noted that the bankruptcy of the Silicon Valley Bank (SVB) was a “bad management case” and that the bank management could not effectively manage the interest rate and liquidity risk.
Emphasizing that the banking system of the USA is solid and resilient with its strong capital and liquidity, Barr stated that they will continue to closely monitor the conditions in the banking system, and that they are ready to use all tools for institutions of all sizes when necessary to keep the system safe and sound.
On the other hand, while the concerns that the pressure on the banking sector in the country might trigger a recession continue to be influential on pricing, uncertainties regarding the Fed’s monetary policy continue.
In the pricing in money markets, it is predicted that the bank will not change the policy rate with a 60 percent probability at the meeting in May, and will increase the interest rate by 25 basis points with a 40 percent probability.
Analysts noted that despite the strong course of inflation in the country, after the banking crisis, the Fed was priced to cut interest rates by 100 basis points until the end of the year, adding that the signals in the macroeconomic data to be announced gained importance because the Fed and the markets did not share the same expectations.
With these developments yesterday, the S&P 500 index rose by 0.16 percent and the Dow Jones index increased by 0.60 percent in the New York stock market, while the Nasdaq index depreciated by 0.47 percent. Index futures contracts in the USA started the new day with rising.
Europe
On the European side, the reduced risks to banks supported the risk appetite, while the European Central Bank (ECB) officials continued their verbal guidance yesterday.
In the news in the European press yesterday, it was stated that ECB member Isabel Schnabel put pressure on the meeting text to include the phrase “more interest rate hikes are possible”.
ECB member Joachim Nagel stated that inflation is still very high, while Mario Centeno stated that the ECB closely follows the developments in the banking sector.
On the other hand, the price of Deutsche Bank shares, which was the focus of the markets after Credit Suisse, increased by 4.5 percent yesterday, ending the three-day downward trend.
With these developments, the DAX 40 index rose 1.14 percent in Germany, the FTSE 100 index rose 0.90 percent in the UK, the MIB 30 index rose 1.21 percent in Italy and 0.90 percent in the CAC 40 index in France. Index futures contracts in Europe started the new day with a rise.
Asia
While there is a limited buying trend in Asian stock markets today, pricing continues, suggesting that the rising recession concerns in the USA may adversely affect the regional economies.
Near the closing, the Nikkei 225 index rose 0.1 percent in Japan, the Kospi index in South Korea rose 0.8 percent, the Shanghai composite index in China rose 0.1 percent and the Hang Seng index in Hong Kong rose 1.3 percent.
Domestic markets
BIST 100 index in Borsa Istanbul, which followed a sales-weighted course yesterday, closed the day at 4,997.80 points, 0.68 percent below the previous closing.
Dollar/TRY is trading at 19.0970 at the opening of the interbank market today, after closing at 19.0918 with an increase of 0.1 percent yesterday.
Analysts stated that in addition to the speech of ECB President Christine Lagarde, the data to be announced, especially the housing price index in the USA, will be followed.
