S & P

Also news that JPMorgan CEO Jamie Dimon is leading discussions with other CEOs of other large US banks in an effort to provide further support, including potentially converting their $30 billion in deposits into a capital injection, only slightly calmed investors' nerves. According to Wall Street Journal, preliminary discussions have been focused on ways that the banks can boost the beleaguered banks capital. Also in play is a potential investment by the banks themselves.

Also according to CNBC, JPMorgan Chase is advising  First Republic Bank on strategic alternatives,  one of which is capital raise which could dilute current shareholders. A sale of the bank is also taken into consideration.

First Republic (FRC.US) stock has been in free fall recently.  Last week alone, a troubled San Francisco-based lender lost nearly 70.0% of its market value. Sell-off accelerated in pre-market, however sellers failed to retest all-time low at $9.00 and buyers managed to erase some of the losses in the evening. Nevertheless, the main sentiment remains bearish and only a break above the local resistance zone around $42.25 could let to a bigger upward correction.

US500

The key event of the month, the FOMC interest rate decision, is ahead of us. Although the Fed's decision is always referred to as the event of the month, tomorrow's decision will be even more closely scrutinized by the market due to the lingering spectre of the banking crisis in the background. The mood on Wall Street is a veritable rollercoaster at the moment, but let us try to take a look at where the US500 benchmark has been moving and what might happen in the coming days.

As we can see on the chart of the US500 contracts on the D1 interval attached below, the instrument's quotations have been moving in a very interesting technical structure for almost 2 years. The US500 broke out above the long-term downtrend line and successfully defended its outer extension, which encouraged the bulls to rise. However, we are inexorably approaching the next limitation, namely the resistance set by the uptrend initiated in the last quarter of 2022.

What will happen next? To answer this question, we need to consider the factors that are shaping current market sentiment, namely tomorrow's FED decision and the specter of a banking crisis. At the moment, the money market is pricing in an 83.4% chance of a 25 basis point hike, which seems market neutral at the moment. However, the key factor will be Powell's comments after the meeting regarding the hike cycle in the context of banking uncertainty. The risk of worsening problems in the sector will go a long way to curbing the hawkish enthusiasm of the Fed, which, remember, is in an advanced stage of tightening and seeing positive developments in the economy, such as last week's good PPI inflation reading.  Today, equity market sentiment was bolstered by further comments from the US Treasury, which was reported to be looking at providing unlimited deposit guarantees (via the FDIC) if the banking crisis worsens. In the event of a dovish FED, stock markets could eagerly extend the current upward momentum and break out above resistance near 4080 points. On the other hand, if the FED maintains a firm monetary stance, a downward impulse could be initiated towards support near 3870 points.

USDCAD

12:30 am GMT - Canada, CPI inflation report for February.

> Headline. Actual: 5.2% YoY. Forecast: 5.4% YoY. Previously: 5.9% YoY
> MoM. Actual: 0.4%. Forecast: 0.6%. Previously: 0,5%
> Core. Actual: 4.7% YoY. Forecast: 4.8% YoY. Previously: 5.0% YoY
> Core MoM. Actual: 0,5%. Previously: 0,3%

The USDCAD pair gained slightly shortly after Canada's CPI inflation reading.

Oil

Alexander Novak, Russian deputy prime minister for fuel energy complex, said that the 500k barrels per day oil output cut that was ordered for March will remain in force through June. Novak said that production has not been slashed by the announced half a million barrels yet but Russia is close to achieving this target cut.

Brent (OIL) and WTI (OIL.WTI) ticked higher on the news. Oil prices jumped around 1% after Novak's comments hit headlines.

JAP225

US indices finished yesterday's session higher amid expectations that the Fed will tighten policy less aggressively in the evening. S&P 500 added 1.30%, Dow Jones moved 0.98% higher and Nasdaq rose 1.58%. Russell  outperformed and managed to finish 1.88% higher
Indices from Asia-Pacific traded higher today - Nikkei jumped 1.94%, S&P/ASX 200 moved 0.87% higher while Kospi and Nifty 50 rose 1.12% and 0.20% respectively
Indices from China traded 0.2-0.45% higher
DAX futures point to a lower opening of today's European cash session
ECB's Nagel said that policymakers have to be "even more stubborn" in inflation fight. In his opinion Eurozone banking system is resilient, not facing repeat of 2008
First Republic Bank could potentially receive government backing, according to Bloomberg
API report pointed to a 3.262 million barrel build in US oil inventories (exp. -1.448 mb)
RBC analysts believe that OPEC would intervene if oil prices dropped substantially.
Russia's Deputy Prime Minister Novak said that the country's current curtailed level of crude oil output would be in place through June 2023.
Commerzbank lowered its 2023 midyear Brent crude oil forecast to US$80 a barrel (from $95)
Cryptocurrencies are trading slightly higher today - Bitcoin gains 0.5%, Ethereum adds 0.4%
Energy commodities are lower - oil drops 1.0% while US natural gas prices fell over 2.6%
Precious metals little changed - silver rose 0.16%, gold trades 0.8% higher
AUD and NZD are the best performing major currencies while USD and CHF lag the most

Nikkei (JAP225) was one of the best performing Asian indices today. Index returned to crucial resistance at 27200 pts, which is marked with previous price reactions and 23.6% Fibonacci retracement of the upward wave launched in March 2020.

Oil

Publication of report from the US Department of Energy caused some moves on the oil market. Crude inventories jumped unexpectedly while gasoline and distillate stockpiles dropped more than expected.

Oil inventories: +1.117mb vs -1.565 mb expected (API: +3.262 mb)
Gasoline inventories: -6.4 mb vs -1.677 mb (API: -1.09 mb)
Distillate inventories: -3.313 mb vs -1.5 mb (API: -1.84 mb)
Oil inventories at Cushing, Oklahoma: - 1.063 million barrels vs -1.558 million barrels previously

WTI Crude Oil (OIL.WTI) price bounced off  local upward trendline and is testing resistance at $70.15.

BTC Retests 9-Month Highs

Cryptocurrencies are gaining along with the major indices on Wall Street. Concerns about the banking crisis have eased somewhat, with investors finally taking a positive view of Fed Chairman Powell's comments yesterday. The rally continues despite news of an investigation into Justin Sun, the creator of the Tron blockchain, and subsequent fines targeting celebrities who promoted his cryptocurrency. The largest crypto exchange in the US, Coinbase (COIN.US), has received a so-called Wells notice evidencing possible enforcement and irregularities identified by the SEC regarding the assets and services offered on the platform.

> The SEC maintains that all cryptocurrencies except Bitcoin are securities, while the Coinbase exchange has announced a confrontation with the regulator in court. At the time of Binance US's acquisition of the assets of bankrupt Voyager, a judge dismissed the SEC's request to halt the transaction;

> He pointed to the unclear regulation of the industry and the incompatibility of the SEC and CFTC regulators towards what cryptocurrencies de facto are. The industry read the position as a possible preliminary precedent for wins against the SEC in other court cases. However, the bullish sentiment faded somewhat after a broader announcement from the US Securities Exchange Commission, which warned against the crypto market;

> SEC maintains that entities that offer cryptocurrency trading may not be operating in accordance with US law. Despite these comments, shares of the Coinbase (COIN.US) exchange managed to erase some of the losses, although still losing nearly 11%. A general increase in risk appetite is supporting the quotations of the largest cryptocurrency.

Bitcoin, M30 interval. The price of the main cryptocurrency rebounded from the 23.6 Fibonacci retracement of the upward wave started on 10 March and the SMA100 and SMA200 averages. It has thus resumed the bullish momentum and is testing the previous resistance near 28,500 USD. Overcoming 28,800 USD could open the way for the bulls to rally towards 30,000 USD.

DE 30

Indices from Asia-Pacific launched new week's trading mixed - Nikkei traded 0.4% higher, S&P/ASX 200 moved 0.1% higher, Kospi dropped 0.2% and Nifty 50 added 0.2%. Indices from China traded 0.2-0.8% lower
Major European and US index futures are trading over 1% above Friday's cash closing prices
DAX futures trade almost 300 points, or around 2%, above Friday's cash close while S&P 500 futures 50 points higher, or around 1.2%
Silicon Valley Bank was sold to First Citizens with around $72 billion worth of assets being purchased at a $16.5 billion discount as part of the deal. All deposits assumed by First Citizens will be insured by FDIC up to the insurance limit
First Citizens will also receive a line of credit from FDIC for unforseen liquidity events
Russian President Putin announced that Russia will station tactical nuclear weapons in Belarus in response to Western countries increasing military support to Ukraine, especially UK providing Ukraine with depleted uranium ammunition
ECB Schnabel noted that headline inflation began to fall, but core gauges are more sticky. She said that financial stress have so far been limited mainly to financial markets
Fed Kashkari said that ongoing banking sector stress could bring the US closer to recession by triggering a credit crunch. However, he has noted that deposit outflow from smaller US banks have slowed and that confidence is being restored
According to Reuters report, Russia is considering extending limits of fertilizer exports by another six months, until November
Riksbank Governor Thedeen said that inflation is developing worse than it was previously thought and that another rate hike in April may be needed
Cryptocurrencies are trading higher at the beginning of a new week - Bitcoin gains 1.4%, Ethereum trades 1.3% higher and Ripple jumps 1.7%. Dogecoin lags and drops 0.2%
Energy commodities trade mixed - oil gains 0.6% while US natural gas prices drop 1.2%
Precious metals are pulling back - gold drops 0.3%, silver trades 0.8% lower while platinum and palladium dip around 0.1% each
EUR and AUD are the best performing major currencies while JPY and NZD lag the most

Futures markets point to a positive opening of a new week in Europe with German DAX futures (DE30) trading almost 300 points above Friday's cash close. Index is attempting to break above a mid-term resistance in the 15,250 pts area.

EURUSD Economic Calendar

> European indices gain at the beginning of a new week
> DE30 tests 15,300 pts area
> German Ifo index for March in the calendar

European stock markets launched today's cash trading session higher with German DE30 testing 15,300 pts area in the first minutes of trade. Upbeat moods can be seen all across the Old Continent and on other financial markets as well with cryptocurrencies trading higher and oil advancing. GBP and AUD are the best performing G10 currencies while USD and JPY lag the most.

Economic calendar for the day ahead is rather light with just two noteworthy survey data prints scheduled. First, traders will be offered the German Ifo index for March, which is expected to stay mostly unchanged. Secondly, the Dallas Fed index for March will be released and it is expected to swing to negative. Nevertheless, this report rarely moves the markets. However, a number of ECB speakers as well as BoE Governor Bailey and Fed Jefferson are scheduled to speak throughout the day and it may lead to some FX volatility. Things get more interesting in the second half of the week with releases of flash CPI data from Europe.

> 9:00 am BST - Germany, Ifo index for March. Expected: 91.0. Previous: 91.1
> 3:30 pm BST - US, Dallas Fed index for March. Expected: -5.0. Previous: 2.0

Central bankers' speeches

> 8:30 am BST - ECB De Cos
> 9:00 am BST - ECB Simkus
> 9:30 am BST - ECB Nagel
> 3:40 pm BST - ECB Elderson
> 4:00 pm BST - ECB Centeno
> 5:00 pm BST - ECB Schnabel
> 7:00 pm BST - BoE Governor Bailey
> 11:00 pm BST - Fed Jefferson

Key events in the later part of the week

Tuesday
> 3:00 pm BST - US, Conference Board consumer confidence for March
> 9:40 pm BST - API report on US oil inventories

Wednesday

> 3:30 pm BST - US, DOE report on oil inventories

Thursday

> 8:00 am BST - Spain, CPI inflation for March
> 1:00 pm BST - Germany, CPI inflation for March
> 1:30 pm BST - US, GDP report for Q4 (revision)
> 3:30 pm GMT - US, EIA report on natural gas storage

Friday
> 2:00 am BST - China, official PMIs for March
> 7:45 am BST - France, CPI inflation for March
> 10:00 am BST - Euro area, CPI inflation for March
> 1:30 pm BST - US, PCE inflation for February
> 3:00 pm BST- US, University of Michigan consumer sentiment for March (final)

EURUSD

EURUSD is struggling to find a direction at the beginning of a new week. The main currency pair is trading little changed on the day even in spite of a decent beat in German Ifo indices for March. Headline Ifo index jumped from 91.1 to 93.3 (exp. 91.0). This beat was driven mostly by a jump in expectations subindex from 88.5 to 91.2 (exp. 88.3). Nevertheless, EUR stayed fairly muted following the release. A number of ECB speakers scheduled for today may provide some volatility on EUR-related FX pairs later into the day. However, euro and other European assets are expected to get more volatile in the second half of the week as flash CPI data from the Old Continent will be released. German reading on Thursday, 1:00 pm BST and French reading on Friday, 7:45 am BST will be the most closely watched ones. Both are expected to show significant deceleration.

Taking a look at EURUSD chart at H4 interval, we can see that the pair halted the recent drop at the 50-period moving average (green line) near 38.2% retracement of the downward impulse launched at the beginning of February. However, subsequent rebound was halted today at the resistance zone marked with 50% retracement and the pair has struggled to determine direction for the next move since. A failure to break above could lead to a retest of the aforementioned 38.2% retracement in the 1.0710 area. On the other hand, a break above would pave the way for a test of swing levels marked with 61.8 and 78.6% retracements in 1.0830 and 1.0920 areas, respectively.

AUDUSD

US indices finished yesterday's trading mostly higher with tech shares lagging behind. S&P 500 gained 0.16%, Dow Jones moved 0.60% higher and Russell 2000 added 1.08%. Nasdaq dropped 0.47%

Indices from Asia-Pacific traded mostly higher today as well. Nikkei gained 0.2%, S&P/ASX 200 traded 1% higher, Kospi added 0.8% and Nifty 50 dropped 0.2%. Indices from China traded mixed

DAX futures point to a slightly higher opening of the European cash session today

Jose Manuel Campa, chair of European Banking Authority, warned in an interview with Handelsblatt that risk in the financial system remains very high and that increasing interest rates are weighing on financial markets

French finance minister Le Maire said that France wants to cut the deficit to 3% of GDP by 2027. French budget deficit stood at 4.7% of GDP and was lower than 5% target set by the government

Russia announced that it has carried out anti-ship missile tests in the Sea of Japan in a move that is seen as response to Japanese PM Kishida visiting Ukraine last week

Goldman Sachs now estimates probability of US economy falling into recession within the next 12 months at 35%, up from previous 25%

Fed's Jefferson said that inflation has been longer lasting and that current policy rate is too high

Israeli Prime Minister Benjamin Netanyahu withdrew a judicial reform that spark nationwide protests

Australian retail sales increased 0.2% MoM in February (exp. 0.3% MoM)

Cryptocurrencies are trading mixed - Bitcoin drops 0.9%, Dogecoin trades 0.6% lower, Ethereum gains 0.3% and Ripple jumps almost 2%

Energy commodities trade mixed - oil drops 0.3-0.4% while US natural gas prices climb 0.7%

Precious metals trade mostly lower - silver and platinum drop around 0.1% each while palladium trades 0.5% lower. Gold is an outperformer with 0.2% gains

AUD and JPY are the best performing major currencies while USD and EUR lag the most

In spite of a miss in Australian retail sales data for February, AUD is one of the best performing G10 currencies today. AUDUSD trades 0.6% higher today and has managed to break above the 200-hour moving average (purple line).