The news shaping the markets today

Ukraine claimed to have eliminated more than 1,000 Russian soldiers in Bakhmut over the course of last week. The safe-haven US dollar index rose this morning.

Australia’s NAB business confidence index fell 10 points to -4 in February, signalling the weakest reading since last November, which exerted pressure on the AUD/USD forex pair.

South Korea’s export prices fell 2.7% year-over-year in February, versus a 1.2% decline in the prior month, sending the KRW/USD pair lower in forex trading this morning.

New Zealand’s number of visitor arrivals jumped by 6480.4% year-over-year to 261,355 in January. However, the latest reading remained 65% below the pre-pandemic levels, which exerted pressure on the NZD/USD forex pair.

The Philippines said its trade deficit had widened to $5.74 billion in January, from $4.51 billion in the year-ago month, which sent the PHP/USD pair lower in forex trading this morning.

What’s happening: The EUR/USD forex pair rose on Monday, extending gains made in the previous two sessions.

What happened: The euro recorded sharp gains despite ongoing concerns around the Silicon Valley Bank shutdown.

The EUR/USD was supported by the ECB’s hawkish stance and pressure on the US dollar.

Why it matters: Hawkish policymakers on the European Central Bank’s governing council are keen to raise the key rate to at least 4%.

Meanwhile, markets expect the US Federal Reserve to ease its aggressive monetary policy tightening due to the collapse in the banking sector and the somewhat weak jobs report released last week. Investors have lowered their rate hike speculations to 50 bps at the upcoming Fed meeting.

News of financial regulators shutting down Silicon Valley Bank, which was the 16th largest bank in the US till last week, shook the global markets. The marked the biggest bank failure since the financial crisis of 2008.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, declined below the 104.00 mark to trade at its weakest level since February 16. The index traded at 103.60, down around 0.9% on the day.

The EUR/USD forex pair rose past the 1.07 level and climbed around 0.9% to 1.0734, hitting a one-month high on Monday. However, European stocks fell to a two-month low, taking the STOXX Europe 600 Index down 2.42% to 442.80.

What to watch: Traders will now focus on US consumer prices data, due to be released today. The annual inflation rate, which eased to 6.4% in January, is likely to decline further to 6.1% in February.

The upcoming European Central Bank meeting on Thursday will also remain in focus.

The markets today

HSBC Holdings will be in focus today after announcing a major acquisition

Context: HSBC acquired the UK arm of the collapsed lender Silicon Valley Bank.

Details: On Friday, the Bank of England said that Silicon Valley Bank UK was entering insolvency, following the failure of California-based Silicon Valley Bank, which is the biggest bank collapse since the 2008 financial crisis.

HSBC averted a crisis in the UK’s tech sector by buying Silicon Valley Bank’s UK arm for £1, following talks led by the country’s Prime Minister Rishi Sunak and the Bank of England.

The UK’s chancellor Jeremy Hunt said that the rescue agreement would ensure the protection of deposits with no taxpayer support.

Mr Hunt added, “We always have to watch everything that’s happening everywhere in the world when it comes to financial stability…But what I would say is the Bank of England is very clear – the UK banking system is extremely secure, it’s well capitalised. And I think we demonstrated that resilience by what was happening over the weekend and the fact that we were able to come up with a solution so quickly.”

Before the collapse, Silicon Valley Bank was the 16th largest bank in the US, worth over $200 billion.

How shares responded: Shares of HSBC Holdings fell 4.1% to close at 568.60 on Monday following the announcement of the deal.

What are expectations: HSBC, which is looking to expand in the market, hopes that the addition of the 3,300 UK clients from SVB UK would boost its British business.

Investors will keep an eye on the country’s financial markets, with expectations of some rebound in the FTSE 100, after the blue-chip index fell around 2.6% to around a two-month low.

Other Markets: US trading indices closed mixed on Monday, with the Dow Jones index and S&P 500 down by 0.28% and 0.15%, respectively, and the Nasdaq 100 up by 0.79%.

Support & resistances for today

Market snapshot

What else to watch today

India’s wholesale price inflation rate, UK’s claimant count change, unemployment rate, average weekly earnings, employment change, Spain’s consumer price inflation rate, Italy’s industrial production, South Africa’s gold production, mining production and manufacturing production, US NFIB small business optimism index, inflation rate and Redbook index, India’s balance of trade, Canada’s new motor vehicle sales and manufacturing sales, as well as China’s foreign direct investment.

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