Thursday Morning Market Headlines
Five Stories Moving the Market:
Yellen says not considering 'blanket insurance' for all U.S. bank deposits – Reuters. U.S. Treasury Secretary Janet Yellen told lawmakers on Wednesday that she has not considered or discussed "blanket insurance" to U.S. banking deposits without approval by Congress as a way to stem turmoil caused by two major bank failures this month.
Fed raises rates by a quarter point, nods to banking stress – WSJ. The Federal Reserve approved another quarter-percentage-point interest-rate increase but signaled that banking-system turmoil might end its rate-rise campaign sooner than seemed likely two weeks ago.
U.S. Senators Scott and Warren unveil bipartisan Fed oversight bill – Reuters. Senators Rick Scott (R-FL) and Elizabeth Warren (D-MA) are introducing legislation to replace the Federal Reserve's internal watchdog with one appointed by the president, aiming to tighten bank supervision following the failures of Silicon Valley Bank and Signature Bank.
ECB’s Wunsch wants time to assess if rates need to rise further – Bloomberg. The European Central Bank will probably need to keep raising interest rates if markets stabilize, but officials need time to assess the full impact of recent turmoil, according to Governing Council member Pierre Wunsch.
China has a new vision for itself: global power – WSJ. Long reluctant to inject itself into conflicts far from its shores, Beijing is showing a new assertiveness as Xi Jinping begins his third term as the country’s head of state, positioning China to draw like-minded countries to its side and to have a greater say on global matters.
Market Headlines:
Global Macro:
The European Central Bank will take a “robust” approach that allows it to respond to inflation risks as needed but also aid financial markets if threats emerge, according to President Christine Lagarde - Bloomberg.
French President Emmanuel Macron drew an angry response from unions and opposition parties on Wednesday when he said he would press on with plans to raise the pension age, rejecting calls for a U-turn in response to growing public anger – Reuters.
A bill to help bring into force the Australia and New Zealand free trade agreements (FTAs) is on the verge of becoming law despite Opposition claims the deals are "pretty lousy" – Bloomberg.
German Bundesbank President Joachim Nagel said the eurozone must be “stubborn” and keep raising borrowing costs to tackle inflation, as rate-setters on both sides of the Atlantic wrestle with the recent turmoil in the financial sector - FT.
President Joe Biden’s top economic adviser Lael Brainard met with JPMorgan Chase Chief Executive Jamie Dimon on Wednesday, as financial services executives and government officials seek to shore up troubled regional banks – Bloomberg.
Interest rates on the most popular U.S. home loan tumbled by the most in four months last week after the failure of Silicon Valley Bank and emergency measures taken to shore up the wider banking system drove a mad dash by investors to the safety of government bonds, the Mortgage Bankers Association said on Wednesday - Reuters.
Freight companies are dialing back expectations that demand will recover strongly in the second half of the year amid growing economic uncertainty and signs retailers are growing more guarded about placing big orders in 2023 – WSJ.
According to a new report from Credit Karma, members of Gen Z saw their average debt balloon to $16,283 in the final quarter of last year, up 3.1% compared to the three months through May; that’s the biggest increase out of any generation – Bloomberg.
U.S. motorists face a repeat of last summer's high gasoline prices, analysts warned on Wednesday, with fuel stockpiles heading towards multi-year lows ahead of the peak summer driving season that begins in two months – Reuters.
Company Specific:
UBS Group said it would buy back $2.96 billion worth of debt it sold just days ago in a bid to boost confidence among bondholders rattled by its $3 billion rescue of rival Credit Suisse - Reuters.
Extra Space Storage is weighing making an offer for Life Storage, the real estate company that rejected a takeover proposal from Public Storage earlier this year, according to people familiar with the matter - Bloomberg.
Pacific Western Bank has raised $1.4 billion from investment firm Atlas SP Partners, the lender said on Wednesday, as the crisis-hit sector scrambles to limit the damage from the recent collapse of two mid-sized lenders – Reuters.
Moderna will price its COVID-19 vaccine at about $130 a dose when it shifts to commercial distribution of the shots later this year, much higher than what the federal government has paid - WSJ.
Job hiring platform Indeed will cut about 2,200 positions, roughly 15% of its total workforce, joining a cohort of technology companies including Amazon.com and Meta Platforms in culling workers amid economic uncertainty – Bloomberg.
Volvo's all-new electric vehicle slated for launch this year will be manufactured in China and exported to Europe and Japan, the Swedish automaker's CEO said in an interview with Nikkei – Nikkei Asia.