Financial market stress indicators reacted sharply on Monday after the failure of three U.S. banks within five days, which prompted a rethink among investors on the outlook for U.S. rates and triggered the biggest rush into bonds since at least 2008.
"I would define the moves we're having today as an old-fashioned flight to quality, this is what normally happens in times of stress. Credit spreads widen, equity markets come off and safe havens provide capital appreciation," Juan Valenzuela, a bond fund manager at Artemis, said.In the money markets, a closely watched indicator of credit risk in the U.S. banking system edged up on Monday, as did other indicators of credit risk in the euro zone.
"It'd be unrealistic to think that banks aren't being more discerning about who they're going to lend money to," said Lyn Graham-Taylor, senior rates strategist at Rabobank.came under fire in early trading. An index of major bank shares dropped by as much as 8.7%, in one of the largest one-day falls since the onset of the COVID-19 crisis in March 2020.
"The more immediate risk is from the U.S., but in both we have quarterly surveys that show banks are already planning to tighten credit standards. Now we have more risk that this tightening becomes disorderly at some point," he said.Euro swap spreads, another risk gauge, widened sharply. Cross-currency basis swaps, a measure of non-U.S. investor demand for the dollar, another safe-haven, reached their widest in three years.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
SVB collapse: Yields post biggest drop since 2008 financial crisisUS bond yields post biggest drop since 2008 financial crisis as Silicon Valley Bank collapse rattles markets
Read more »
Silicon Valley Bank exec was Lehman Brothers CFO prior to 2008 collapsePrior to the Lehman Brothers collapse, Joseph Gentile was its CFO until 2007 when he left and became Silicon Valley Bank's Chief Administrative Officer.
Read more »
Bitcoin battles $20K as trader calls bank chaos ‘2008 all over again’Bitcoin struggles to reclaim $20K support amid fears of Silicon Valley Bank contagion. Trader targets $18K BTC price as bank chaos sparks market turmoil.
Read more »
FBI offering $250K reward for unsolved 2008 Times Square bombingNEW YORK — The FBI announced a new reward Tuesday of up to $250,000 for information leading to the identification, arrest and conviction of the suspect involved in the unsolved 2008 bombing of the U.S. Armed Forces recruiting station in Times Square.
Read more »
Silicon Valley Bank collapse, biggest since 2008Jonathan Capehart and Rep. Katie Porter discuss the Federal Deposit Insurance Corp. (FDIC) taking control of Silicon Valley Bank and its deposits after the bank shut down in what is the largest U.S. bank failure since the global financial crisis more than a decade ago.
Read more »
SVB Exec Served as CFO for Lehman Brothers Before 2008 CollapseBefore joining the Silicon Valley Bank as the Chief Administrative Officer (CAO) in 2007, Joseph Gentile served as the Chief Financial Officer (CFO) at Lehman Brothers’ Global Investment Bank before the public collapse in 2008.
Read more »