Wednesday, 22 March 2023 06:21

Reverberations stemming from SVB

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It’s been, um, shaky times, for Silicon Valley Bank. Perhaps you’ve heard.

Well, Wall Street certainly has. On the heels of the air going out of the balloon of the bank, U.S. Treasury markets have been enduring volatility to the max, reported reuters.com.

The ICE Boa MOVE Index (.MOVE) – a measure of anticipated treasuries volatility – has exploded beyond its high in the face of COVID. Today? It’s around levels experienced, during -- you  probably had a hunch -- the financial crisis.

Traders were compelled to reverse their bets on steepling rates in light of expectations the Fed would pause or ease up on increases in interest rates given the lighting fast fall of the bank, coupled with  Signature Bank’s.

Earlier in the year, Deloitte issued a banking and capital markets outlook in which, among other things, it laid out the global economy’s remaining fragility entering the year, according to deloitte.com. Uncertainties? You betcha, such as those stemming from a cocktails of factors, including the invasion of Ukraine, a topsy turvy supply chain, barreling inflation and a global tightening of monetary policy.

Banks, over the long run, the outlook continued, should look past product, industry or business model boundaries and seek new sources of value.

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