EUR/USD 1.16265
0.142%
Gold 5210.38
0.357%
Oil 82.843
-2.809%
USD/JPY 158.254
0.137%
GBP/USD 1.34454
0.212%
GBP/JPY 212.783
0.393%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Piper Jaffray: Lowered its target price for Oracle (ORCL.N) from $240 to $210.March 11 - According to the official WeChat account of China Railway, from January to February this year, the national railway completed 72.2 billion yuan in fixed asset investment, a year-on-year increase of 5.4%. Railway construction is progressing with high quality and efficiency, injecting new momentum into regional economic and social development.March 11th - Today (March 11th) marks the 38th day of the Spring Festival travel rush. According to the Ministry of Transport, as of today, the total number of cross-regional passenger trips across society is expected to exceed 9 billion.The Hang Seng Tech Index rose to 1%, while the Hang Seng Index is currently up 0.47%.March 11 - Shipping data released on Tuesday suggests that Saudi Arabias oil shipments via the Red Sea are on track to reach a record high in March, though still far below the decline in oil flow through the Strait of Hormuz. Data from the London Financial Exchange Group shows that Yanbu Ports average loading volume for the first nine days of March reached 2.2 million barrels per day, up from nearly 2 million barrels per day last week and 1.1 million barrels per day in February. Before the closure of the Strait of Hormuz, Saudi Arabia exported approximately 6 million barrels of oil per day through the strait. Kpler shipping data indicates that at least 40 tankers may load in March, potentially pushing exports above 4 million barrels per day. However, while traders claim the ports capacity exceeds 4.5 million barrels per day, actual loading volumes rarely exceed 2.5 million barrels per day.

After A Fed Rise, The U.S. Banks Stress Index Might Deteriorate

Aria Thomas

Jun 17, 2022 11:09

14.png


An indicator of credit risk in the U.S. banking sector may be exhibiting symptoms of strain as the Federal Reserve's aggressive rate rise path heightens economic pain forecasts.


According to Refinitiv data, the so-called FRA-OIS spread, which measures the difference between the U.S. three-month forward rate agreement and the overnight index swap rate, jumped to 29.50 basis points on Thursday, its widest level since May 23. The value was -11.66 basis points earlier in the week.


Widely regarded as a barometer for banking sector risk, a wider spread indicates that interbank lending risk has increased.


The recent increase in the margin between forward rate agreements and overnight index swap rates is worrisome, according to J.P. Morgan Asset Management global market analyst Jordan Jackson. "As the Fed becomes more hawkish, recession fears increase, hence boosting the underlying credit risk."


The Federal Reserve hiked interest rates by 75 basis points on Wednesday, its largest rise since 1994. Markets have been rocked by the prospect of more dramatic tightening, and fears of a future recession have intensified.


This month, the central bank also started letting bonds to expire off its more than $8 trillion balance sheet without replacing them, a procedure known as quantitative tightening that Jackson warned may possibly deplete the financial system's liquidity.


As the world's biggest holder of U.S. government debt lowers its market presence, this sentiment is shared by other investors who are concerned that market conditions may deteriorate.


"Now that quantitative tightening has formally begun, reserve draining has been rather steady over the last several months," Jackson said, adding that he expects the FRA-OIS disparity to become much wider.


Wall Street also perceives an increase in the likelihood of default by large banks.


On Thursday, credit default swap (CDS) spreads for JP Morgan, Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and Bank of America (NYSE:BAC) were nearing two-year highs.


Suggestion