On Tuesday, the Japanese yen increased sharply amid risk aversion on renewed bank concerns and an increase in government bonds. The US dollar also increased. A week before the FOMC, bank worries have returned, an episode reminiscent of March.
The First Republic Bank gaining calls have raised concerns about the circumstances of the banking sector. Bank’s executive conveyed prepared comments and declined to accept questions. The bank lost $102 billion in customer deposits and raised $92 billion in the first quarter. Share lost almost 50% on Tuesday. Bank stocks have declined sharply.
Global equity markets declined while bonds rallied, strengthening the yen and dollar. The Dow Jones declined by 1.02%, and the Nasdaq declined by 1.98%. The US 10-year bond yield was 3.39%, the lowest since April 12.
US economic data came mostly ahead of expectations, with positive signals from the housing sector. The S&P/Case-Shiller home price index increased for the first time in 8 months as new home sales increased by 9.6% to 638.000 units yearly in March, the third rise in four months. CB consumer confidence fell, but the current situation indicator improved. The critical report will be released on Thursday, along with the first reading of first-quarter GDP and consumer price inflation.
EUR/USD increased to 1.0960 from higher weekly highs of 1.1050 as Eurozone yields declined on risk aversion. On Friday, the GDP and inflation data will be released.
A rate hike is expected at the next Bank of England meeting. GBP/USD moved from 1.2500 to 1.2400 on a stronger dollar backdrop. EUR/GBP hit 0.8875, a month’s highest, before returning to 0.8840.
The Japanese yen increased on Wednesday. USD/JPY hit a 10-day low at 133.35. CHF/JPY hit 151.51, its highest level since 1980, then reversed sharply and fell below 150.00.
AUD/USD closed monthly low below 0.6650. On Wednesday, Australia is due to announce inflation, and the Reserve Bank of Australia will assemble next week
NZD/USD solicited 0.6200, then reserved against a strengthening US dollar, dropping below 0.6150. New Zealand trade data will be released on Wednesday.
USD/CAD is up for the fifth straight day, breaching 1.3600 for the first time since late March on deteriorating market sentiments and reduced oil prices.
Cryptocurrencies are up despite falling stock markets.
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