Markets remain calm as JP Morgan takes control of First Republic
Global markets were virtually unchanged overnight despite news that another US bank had failed after the troubled First Republic fell under the control of the FDIC (Federal Deposit Insurance Corp).
JP Morgan won a quickly executed FDIC auction before the start of Monday’s trading and paid USD10.6bln to take over most of First Republic’s assets.
The US’s benchmark bank measure – the KBW regional banking index – fell 2.7% but otherwise it was a remarkably quiet session across US markets. The S&P 500 was flat while the Nasdaq dropped 0.1%. Volatility remains at lows.
Most European markets and many Asian markets were closed for the May Day holiday.
Aussie rebounds, kiwi mostly lower
The AUD/USD rebounded from the support zone at the six-month lows.
The bounce from support was another sign that global markets remain in a consolidation phase after the massive rally seen at the end of 2022.
The AUD/USD gained 0.4%.
The Aussie was higher in other markets with the AUD/EUR up 0.7% and the AUD/JPY extending last week’s gains, up 1.1% and at two-month highs.
The kiwi was lower.
RBA due at 2.30pm AEST
The Australian dollar was higher ahead of today’s Reserve Bank of Australia decision.
Financial markets only see a 10% chance of a hike after last week’s lower than expected inflation reading.
The RBA has said that it wants to wait and assess the impact of its year-long campaign of rate hikes – household confidence and savings have both plunged over the last 12 months.
The RBA decision is due at 2.30pm AEST.
Aussie rebounds from lows
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 1 – 5 May
All times AEST
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