EUR/USD 1.16121
-0.114%
Gold 4387.91
-1.532%
Oil 89.779
1.606%
USD/JPY 159.482
-0.019%
GBP/USD 1.34054
-0.162%
GBP/JPY 213.797
-0.175%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Xiaomi Group (01810.HK) rebounded after hitting a low, rising more than 1%, after falling more than 3% at one point.On May 28, US President Donald Trump filed a new $10 billion defamation lawsuit against The Wall Street Journal and its parent company, News Corp., over a report that alleged his close relationship with Jeffrey Epstein. The initial lawsuit in the same case was dismissed by a judge. The revised complaint was filed Wednesday evening in federal court in Florida, just before the judges deadline. The initial lawsuit was dismissed because the judge ruled that the plaintiff failed to sufficiently prove that the report was written with "actual malice" against Trump—a high threshold for defamation lawsuits against public figures. Trumps lawsuit targets a Wall Street Journal report published in July 2025. The report stated that Trump sent Epstein a "vulgar" birthday card in 2003, which Trump has repeatedly claimed was forged.Former Bank of Japan Deputy Governor Masazumi Wakatabe: The claim that the yens depreciation accelerated after Prime Minister Sanae Takaichi took office is untrue; the yens depreciation began in 2022.Former Bank of Japan Deputy Governor Masazumi Wakatabe stated that it is necessary to assess whether the economy is strong enough to withstand the Bank of Japans interest rate hikes, and whether or not interest rates will be raised in June is not actually the key issue.Musk: SpaceX has not committed to a long-term lease of Colossus, although that is certainly a possibility. It is a 180-day lease agreement, after which either party can terminate the contract with 90 days notice.

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