US measures to reassure the stability of the banking system after several bankruptcies allow Wall Street to rebound on Monday, while European markets remain in bright red.
After an opening at half mast and two sessions of strong decline, Wall Street returned to positive ground: around 3:30 p.m. GMT, the Dow Jones index took 0.75%, the S&P 500 0.80% and the Nasdaq 1 technological index .32%.
The European markets remained down sharply, but recovered a little after losing more than 3% at the start of the afternoon: Paris and Frankfurt fell by 2.34% and 2.49%. London yielded 2.04% and Milan 3.24%.
The debt market, perceived as safe haven investments in the event of a crisis, was also experiencing a turbulent session: certain government securities, in particular the short-term debt of the United States, posted historic declines.
Oil, after having fallen by more than 4%, only fell by almost 1%, while gold took 2.4%.
Investors remain feverish and prices volatile despite the efforts of the American authorities to avoid contagion after the failure of three American banks.
Americans can “have confidence” in a “sound” banking system, President Joe Biden said from the White House, assuring that he would do “whatever is necessary” to keep it that way.
On Sunday, the US authorities had already announced that the deposits of the bankrupt Silicon Valley Bank (SVB) would be fully guaranteed and the US Federal Reserve (Fed) pledged to lend the necessary funds to other banks. to honor withdrawal requests.
“It’s not a federal bailout, but it provides guarantees,” says IG analyst Alexandre Baradez.
Confidence in American regional banks nevertheless seems broken after three bankruptcies in recent days, including that of Silicon Valley Bank. “Only the big banks seem safe,” Lionel Melka, a partner at Swann Capital, told AFP.
The Californian bank First Republic, which dropped 30% in two sessions, plunged 70% and the Western Alliance 62%.
For Gilles Gibout, of Axa IM, the episode “highlights the less direct impact of the rise in interest rates on banks”.
New bright red sessions for bankers
On Friday, European banking stocks fell again on Monday, with an even more marked movement for banks perceived as less solid: Credit Suisse unscrewed by 9.46%, while the German Commerzbank plunged by 12.52%. The French BNP Paribas and Société Générale fell by 5.81% and 5.19% and the Italian Unicredit by 8.28%.
HSBC, which lost 4.05%, announced Monday morning to buy the British branch of Silicon Valley Bank for one pound, which allows customers to “access their deposits and their banking services normally”.
Falling dollar
This crisis in the banking sector “changes the game regarding the expectations of the Fed”, underlines Ipek Ozkardeskaya, of Swissquote Bank.
The sharp increases in key interest rates over the past year in order to fight inflation have contributed to weakening the banks and slowing down economic activity.
Faced with events, the markets are now anticipating a slowdown in the pace of the Fed’s rate hikes at the next meeting on March 21 and 22.
In Europe, “it is difficult to see why the ECB should not carry out the 50 basis point increase”, but the doves, supporters of an accommodating monetary policy, now have “more arguments” for the future, estimates Carsten Brzeski, economist at ING.
Sovereign rates fell on the bond market on Monday. The interest rate for the 10-year US loan was 3.46%, against 3.70% on Friday at the close, while the two-year rate experienced an unprecedented drop since 1987, of more than 50 points. basis at 4.06%.
German 10-year debt interest was trading at 2.23% versus 2.50% on Friday at the close.
The dollar fell against other currencies: the euro recovered 0.84% to 1.0732 dollars and the pound 1.24% to 1.2179 dollars.
Bitcoin soared 14% to $24,480, buoyed by hopes of a looser monetary condition.
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