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  • richard evans

Equities wobble on SVBank worries ahead of US employment numbers

Good morning

Headlines seem to be focussed on Silicon Valley Bank after its share price fell some 60% as it announced it is looking to raise more cash. SVB is not a bank I know much about but the funding concerns led to falling equity prices across US and Asia.

Currencies are little changed, although USD did lose some ground yesterday as the post-Powell buying ran out of steam. GBPUSD traded up to 1.1960 and EURUSD just managed to break 1.0600 this morning although both pairs are now a bit lower at 1.1930 and 1.0575 respectively. GBP a little higher against EUR at 1.1280, given a bit of a boost by very slightly better UK GDP numbers out this morning.

BoJ left policy unchanged at Kurodas last meeting which sent USDJPY higher from 135.95 to 136.95, however the lower equities and a bit of a return to safe haven buying helped yen recover part of those losses, the pair now 136.35.

AUD has come under more pressure than some, AUDUSD down at 0.6580, while the yen buying has sent AUDJPY back below 90.00, it had traded as low as 0.8925 before BoJ, did creep back above 90.00 briefly but now sits 89.70. I only mention this as you may recall back on 17th Feb I looked at some downside AUDJPY ideas for a break below 90.00, if it can drift a bit lower I’ll be happy although with just over two months to go it is far too early to be counting profits.

Later today we will have US employment numbers, a headline in the low +200k area is consensus although I have seen a few banks looking for a stronger reading, up in the high 200s. The higher the number, the more support USD is likely to get. After Powell’s comments earlier in the week there is a chance for more volatility than normal over this release.

Elsewhere, Russia continue missile strikes on Ukraine, this time there are reports that they have used hypersonic missiles that are extremely difficult for air defences to shoot down. Putin does seem to be stepping up his offensive, I wonder whether this is ahead of another push on the ground.

Looking to the weekend, the weather seems pretty miserable although we’ve not had any more snow but temperatures remain low. I made the potential mistake of allowing my daughter to have a party this evening. She is a sensible girl but getting 60 or so teenagers together rarely goes without incident. Was rather hoping they’d spend their time outside but with minus temperatures expected they are more likely to remain indoors. Can’t say I’m looking forward to it. Wish me luck!

We have some six nations rugby, with England playing France on Saturday, while Italy may well fancy their chances against Wales. Meanwhile Spurs take on Nottingham Forest, after recent performances I can’t say I’m confident, but anything other than a strong victory is likely to put Conte under even more pressure.

Have a great weekend when it finally comes……..

- 09.00 ECBs Panetta speaks

- 12.00 UK NIESR GDP estimate

- 13.30 US nonfarm payrolls

- 13.30 CAD employment

- 15.00 ECBs Lagarde speaks

- 19.00 US monthly budget statement


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