Shares of the Swiss bank Credit Suisse extended the losses Wednesday morning and hit a fresh record low. The strong bearish sentiment was fueled after Credit Suisse’s top shareholder; the Saudi National Bank ruled out further assistance to the Swiss bank. Saudi National Bank said it cannot give more money to Credit Suisse because cannot go above 10% ownership due to regulatory issues.
The bank also released its previously postponed annual report yesterday. It identifies "significant weaknesses" in internal controls over financial reporting and adds that it has not yet contained customer cash outflows.
Wall Street ends higher on Tuesday following a steep sell-off in the last 3 days. The upside sentiment was lifted after the latest economic data showed that US inflation slowed as much as estimated. Meanwhile, US stock futures trading in a narrow range Wednesday morning as traders and investors are waiting for fresh retail sales data.
Crude oil prices are under huge selling pressure as the closure of Silicon Valley Bank, followed by Signature Bank, has undermined market confidence and raised recession risk fears. Crude oil futures edged lower Wednesday Morning after a large build in U.S. crude inventories. The latest API crude inventory data showed the US crude inventories increased by 1.555 million barrels in the week ended March 10th, following a 3.835 million barrels fall in the previous week.
In the currency market, the dollar index (DXY), which tracks the currency against key rivals slightly recovered and registered modest gains. The short-term recovery was helped by positive comments from Federal Reserve Governor Michelle Bowman. She remarked that the banking sector remains "resilient and on a solid foundation, with strong capital and liquidity." She disclosed that the Fed continues to closely monitor developments across the financial system.
Spot gold prices reversed sharply lower from above $1900 to under $1886 on Wednesday morning. Moving ahead to the North American session, gold traders and investors should closely monitor the release of the US Producer price index and retail sales figures which might have a very high impact on the dollar which will result in an impact on the gold price.
On the data front, US CPI inflation rates came in as expected, and the stocks and precious metals reacted with minor gains. US CPI for February came in at 6% as against 6.4% in January 2023. Despite US inflation softening the market participants are still expecting only a 25-basis-point interest rate hike by the U.S. central bank this month.
Moving ahead today, the important events to watch:
US – Retail sales: GMT – 12:30
US – PPI: GMT – 12:30
Technical Outlook and Review
EURUSD: The currency pair needs a clear break of 1.0750 to move further upside 1.0800 and 1.0850. On the flip side, a breakdown through 1.0650 would negate that bias and suggest a test of the 1.0600 and 1.0580 support region again.
The important levels to watch for today: Support- 1.0650 and 1.0590 Resistance- 1.0700 and 1.0750.
GOLD: The precious metal remains volatile. The metal rebounded back to above 1905 after hitting a fresh session low of $1886. If the bullish sentiment continues next key resistance to watch is $1914 then $1920. On the downside, the immediate support near 1898 then 1895, break below 1895 will open the doors to $1885 and 1880 levels.
The important levels to watch for today: Support- 1880 and 1872 Resistance- 1914 and 1920.
Quote of the day – “The hardest part of investing is holding on through difficult periods and taking short-term pain so you can have long-term gains” — Jim Cramer.