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Financial Markets React to Banking Turmoil and Cryptocurrency Surge


Stay ahead of the game with today’s market insights brought to you by the expert team at vtmarkets.com.

Following the recent collapse of several American regional banks and the Credit Suisse Group AG crisis, investors have begun to recall memories of the 2008 financial crisis. Speculation is rife that major central banks may need to provide liquidity support to financial regulators. As a result, the S&P 500 initially plummeted by over 2%. However, the decline was subsequently cut in half. Despite the release of the US Consumer Price Index (CPI) numbers and a rebound in US Treasury yields, the yield on 10-year Treasuries dropped by 22 basis points to 3.47%. Except for the Japanese yen, the dollar rallied against all other developed-market peers.

Meanwhile, Bitcoin continues to make sharp moves, peaking at $26,500, the highest since June 2022, before pulling back to $24,500. Gold and Silver moved sideways, holding onto most of Monday’s gains. This suggests that some investors may have more confidence in cryptocurrency than traditional currency.

In the benchmark, the S&P500 fell by 0.7% due to the banking turmoil rippling through financial markets. Only four out of eleven sectors remained in positive territory. Among all groups, the Communication Service and utility sectors delivered the best performance, surging by 1.5% and 1.34% respectively on a daily basis. The worst-performing sector was Energy, which dropped by 5.42%. USOIL reached its lowest point since 2022, at 68.54.

Main Pairs Movement

On Wednesday, the dollar experienced an upswing due to safe-haven buying. Credit Suisse’s recent stock drop has investors concerned about potential weaknesses in its financial reporting and the possibility of a global banking crisis. The DXY index gained momentum during the European trading session, reaching a daily high of 105.1 at the beginning of the US trading session.

GBPUSD experienced a sell-off after reports of internal “materialistic weaknesses” within Credit Suisse surfaced, causing market sentiment to plummet. The pair slumped during the UK trading hour but managed to find support at the 1.2010 level and rebounded to 1.2070 during the middle of the US trading session. On the other hand, EURUSD dropped significantly with losses of almost 2% during the UK trading hour, and closed the day with a 1.45% loss.

Gold buyers flexed their muscles around $1,920 after reaching the highest levels in 1.5 months following Credit Suisse’s weak financial reporting. The market’s risk profile worsened as the CS episode followed the latest fallout of Silicon Valley Bank (SVB) and Signature Bank. The XAUUSD gained bullish momentum during the UK trading session, climbing above the $1935 mark before losing traction and closing around the $1920 mark.

Credit Suisse’s impact on the market has significantly affected several key currency pairs and gold prices. This event highlights the importance of sound financial reporting and transparency in the banking sector to prevent future crises. It also underscores the need for investors to remain vigilant and informed in their decision-making processes.

Stay ahead of the game with today’s market insights brought to you by the expert team at vtmarkets.com.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
NZDGDP (QoQ) (Q4)05:45-0.2%
AUDEmployment Change (Feb)08:3048.5K
USDBuilding Permits (Feb)20:301.340M
USDInitial Jobless Claims20:30205K
USDPhiladelphia Fed Manufacturing Index (Mar)20:30-15.6
EURDeposit Facility Rate (Mar)21:153.00%
EURECB Marginal Lending Facility21:15N/A
EURECB Monetary Policy Statement21:15N/A
EURECB Interest Rate Decision (Mar)21:153.50%
EURECB Press Conference21:45N/A
EURECB President Lagarde Speaks23:15N/A