HONG KONG, March 28 (Portal) – Global stock and US bond yields rose on Tuesday as a US regulator-backed deal by First Citizens BancShares to buy the failed Silicon Valley bank eased widespread concerns about troubles in the industry .
MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) was up 0.3% through early morning Hong Kong time. US stock futures, the S&P 500 E-Minis, rose 0.21%.
Australian shares surged more than 1% as lithium and commodity stocks rallied after battery metals explorer Liontown Resources (LTR.AX) received a takeover bid from Albemarle Corp. in the amount of 3.7 billion US dollars.
Top US banking regulators said Monday they plan to tell Congress the entire financial system remains on solid footing after recent bank failures, but will comprehensively review its policies to prevent future collapses.
Concerns have not entirely gone away, however, as Federal Reserve Governor Philip Jefferson said on Monday that small-bank stress could hit small businesses hardest.
The dollar slipped to 130.76 yen from late New York highs of 131.75 and 131.54 in Asia.
“This round of uncertainty that we’re seeing is likely to continue for some time,” said Manishi Raychaudhuri, head of equity research for Asia Pacific at BNP Paribas. “We haven’t seen the end yet.” He expects continued volatility for global markets for at least a quarter or two.
In addition to concerns over contagion from banking troubles in developed markets, markets have also been rocked by wild shifts in expectations of what central banks in the United States and Europe might do next, Raychaudhuri said.
“One day the market might expect a 25 basis point rate hike, or maybe 50 basis points. Within a day or two, that outlook for 50 basis point rate cuts in the second half of the year changes. ” he said.
On Monday, the S&P 500 ended slightly higher as a deal for Silicon Valley Bank assets helped boost bank stocks, while technology-related stocks fell after a strong quarter on profit-taking.
US Treasury yields rose on optimism that stress in the banking sector might be contained and as the Treasury saw weak demand for a sale of two-year notes.
Benchmark 10-year yields rose to 3.5317% from Monday’s US close of 3.528%. They are also up from a six-month low of 3.285% set on Friday but remains below a 15-year high of 4.338% set on October 21.
Two-year yields rose to 3.957%, up from a six-month low of 3.555% on Friday, but below the nearly 16-year high of 5.084% set on March 8.
On the downside, oil prices rose more than $3 on Monday as a halt to some exports from Iraq’s Kurdistan region added to concerns over oil supplies, while a takeover of a US bank allayed fears that financial turmoil is hurting the economy and could curb fuel demand.
As of Tuesday morning Hong Kong time, both Brent crude oil futures and West Texas Intermediate US crude oil were trading around Monday’s close.
Gold was slightly higher. Spot gold was trading at $1,957.96 an ounce.
Editing by Sam Holmes
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