First Republic worries return
Global markets saw a rapid return of volatility overnight after troubled US bank First Republic said it had seen around USD1000bln worth of recent customer withdrawals and would need to sell assets to stay viable.
First Republic gained headlines in mid-March after receiving a USD30bln support package from a consortium of banks including Citigroup and JP Morgan.
US shares fell on the news with the S&P 500 down 1.6% and the Nasdaq falling 1.9%.
April has so far been defined by remarkably quiet trading – until last night, the S&P 500 hadn’t seen a 1.0% drop for 22 consecutive session – but the news from First Republic shocked markets out of their recent lethargy.
Aussie hardest hit as commodities fall
The Australian dollar was the hardest hit in the FX space.
A steep sell-off in commodities markets hit the Aussie with crude oil down 2.0% while copper fell 2.7%.
The AUD/USD fell 1.1% as it dropped to the lowest level since 15 March.
The Aussie was lower in other markets with the AUD/EUR down 0.4% and the AUD/JPY losing 1.4%.
The kiwi held up better was but still lower versus the greenback, with the NZD/USD down 0.5%. The kiwi was stronger in other markets.
Australian inflation due
Australian inflation numbers, due at 11.30am AEST, are today’s major release.
The quarterly headline numbers are expected to see March-quarter inflation falling from 1.9% to 1.3% while the annual result is seen as falling from 7.8% to 6.9%.
The relatively new monthly series for March is also due today. The annual rate, as measured in the monthly series (which isn’t as comprehensive the quarterly series) is forecast to fall from 6.8% to 6.5%.
Aussie underperforms as commodities drop
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 24 – 28 April
All times AEST
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