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Russian President Vladimir Putin visited Mariupol as part of his surprise tour of the occupied part of Ukraine. The safe-haven US dollar index rose this morning.
Canada’s producer prices eased to more than a two-year low of 1.4% in February, from 5% in the prior month, lending support to the CAD/USD forex pair.
US manufacturing production declined by 1% year-on-year in February, following 0.1% growth in January. The news exerted pressure on the US indices on Friday.
Russia’s central bank held its key interest rate at 7.5% for the fourth consecutive time, at its March meeting. This was in-line with market expectation and the RUB/USD pair remained broadly stable in forex trading this morning.
Brazil’s unemployment rate rose to 8.4% in the three months to January, from 8.3% in the previous quarter. The figure was above market expectations of 8.3% and exerted pressure on the BRL/USD forex pair.
What’s happening: Investors turned to the crypto market on concerns around the traditional financial system.
What happened: Earlier in March, the collapse of Silicon Valley Bank was closely followed by the failures of Signature Bank and Silvergate Capital.
Although market sentiment was hurt by the closure of these banks, the impact on the crypto market proved to be short-lived.
Why it matters: Silicon Valley Bank, the 16th largest bank in the US and the largest bank by deposits in Silicon Valley, was shut down by federal regulators on March 10, after its depositors withdrew large amounts of money. This was followed by the collapse of other lenders, sending banking stocks around the world significantly lower.
The cryptocurrency market came under pressure immediately after the news, Silicon Valley Bank had crypto startups as customers. Moreover, the other two lenders that failed, Silvergate Capital and Signature Bank, were main banks for crypto companies.
However, concerns around the traditional financial systems lent support to the largest cryptocurrencies, like Bitcoin and Ethereum. Sentiment for cryptocurrencies has also been lifted by a spike in volumes of stablecoins being traded in centralised exchanges.
After the initial shockwaves sent by the failure of US banks, a number of positive developments supported investor sentiment. JP Morgan Chase and the Federal Reserve extended $70 billion in emergency loans to First Republic Bank, preventing another bank from collapsing.
There were also reports of First Citizens considering an acquisition of Silicon Valley Bank.
Bitcoin, which was trading close to $20,200 on March 10, continued a steep ascend through last week, rising close to the all-important resistance level of $28,000 on March 19. Ethereum rose from around $1,430 on March 10 to confidently breach the $1,800 mark over the weekend.
What to watch: Markets will closely monitor the US government’s moves to prevent a banking crisis. The government’s actions to protect the depositors of SVB and Signature, many of which are crypto companies, will also remain in focus.
Context: Although the company missed revenue expectations, investor sentiment was supported by an important announcement.
Details: FedEx’s revenues fell 6% to $22.2 billion in the fiscal third quarter ended February 28, and was short of the consensus estimate of $22.74 billion.
The company’s net income came in at $865 million. Adjusting for one-time items, earnings stood at $3.41 per share. Although the earnings declined from the same quarter last year, the figure beat Wall Street expectations by 68 cents.
Volumes declined at FedEx’s Express, Ground and Freight Trucking divisions, resulting in the revenue miss. To contain costs, the company reduced flight hours by 8% and trimmed salary and benefit expenses by 4% at its Express division.
FedEx announced plans to reduce $3.7 billion in costs from its global delivery business. The company also announced to lay off 25,000 workers by May 2023.
Management raised their earnings guidance for fiscal 2023 from $13.00-$14.00 per share to $14.60-$15.20 per share.
Shares of FedEx jumped almost 8% to $220.31 on Friday. The stock has gained more than 28% year to date.
What to watch: Traders will keep an eye on FedEx’s execution of its cost cutting initiatives. Markets also look forward to new initiatives in generative artificial intelligence that the company is expected to announce at a conference in Las Vegas this week.
Other Markets: US trading indices closed lower on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 1.19%, 1.10% and 0.74%, respectively.
| Technical Levels | News Sentiment |
| AUD/USD – 0.598 and 0.666 | Positive |
| GBP/USD – 1.052 and 1.140 | Negative |
| FTSE 100 – 7226 and 7678 | Positive |
| WTI Crude Oil – 85.41 and 105.59 | Negative |
| Gold – 1560 and 1706 | Positive |
| Futures at 0400 (GMT) | ||
| EUR/USD (1.0673, 0.04%) | Dow ($31,861, -0.19%) | Brent ($72.28, -0.7%) |
| GBP/USD (1.2183, 0.03%) | S&P500 ($3,916, -0.10%) | WTI ($66.19, -0.8%) |
| USD/JPY (131.81, -0.01%) | Nasdaq ($11,630, -0.74%) | Gold ($1,980, 0.3%) |
Germany’s purchase managers index and Bundesbank monthly report, Eurozone’s balance of trade, 5-year bond auction and 10-year bond auction, Canada’s new motor vehicle sales and 5-year bond auction, France’s 3-month BTF auction, 6-month BTF and 12-month BTF auction, Turkey’s central government debt and ECB President Christine Lagarde’s speech.
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