This week we will discuss US Fed chair Jerome Powell testimony, BOJ Meeting outcome and its commitment to maintain ultra-accommodative policy and collapse in (SVB) Silicon Valley Bank on Thursday after reporting $1.8 billion loss on bonds to meets client’s cash demand.
Bank of Japan – Policy outcome & Statement
• BOJ kept interest rate unchanged at -0.10% Vs estimate of -0.10%
• The Bank will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent.
• JGB yield curve control maintain at -0.50% to 0.50%
Silicon Valley Bank – SVB Financial Group (SIVB)
On Friday as on 7:35 PM IST, trading halted @ $39.40 down 62.84% in a pre-open market. On Friday, regulator shut down SVB financial group, regulator appoint FDIC as received and deposit to be secured through FDIC – Federal Deposit Insurance Corporation.
Equichain Wealth Advisors: Market View & Opinion
We continue to maintain our view as on last week as now there is added challenge for US Fed as SIVB issue is still evolving. US Fed post meeting conference will and guidance of future action will be an important event as more hawkish US Fed will challenge economic activity which is already showing signs of slowdown. Key challenge for US Fed will be to manage soft landing.
US Treasury Janet Yellen closely monitoring situation as SVB financial group shutdown by regulator and it could impact other banking system. SVB is the largest failure since 2008. We remain cautious as situation is evolving and early pause or pivot could be very much possible as we mentioned in our Repeat of August 2007 – January 2008 phase.