• US stocks gained with the Nasdaq leading advances; Asian stocks rose amid improved global risk appetite following recent bank lifelines
• DXY is subdued amid improved risk tone, while the Fed's balance sheet jumped to its highest since November as banks rushed for liquidity
• Crude futures are mildly higher as some banking sector fears are allayed, although WTI remains below USD 70/bbl
• Credit Suisse is being sued by shareholders in the US over a failure to disclose material weakness in internal controls and significant Q4 outflows
• Looking ahead, highlights include EZ HICP (Final), US Industrial Production, Leading Index Change, Univ. of Michigan (Prelim.) and Quad Witching

US TRADE

EQUITIES

• US stocks gained with risk appetite lifted by global banking support after the SNB gave a lifeline to Credit Suisse (CSGN SW) and 11 large US banks teamed up to help First Republic Bank (FRC) with a deposit of USD 30bln. The Nasdaq led the advances amid notable strength in Communication and Technology, while the defensive sectors underperformed.
• SPX +1.76% at 3,960, NDX +2.69% at 12,581, DJIA +1.17% at 32,246, RUT +1.45% at 1,771.
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NOTABLE HEADLINES

• Fed reported a record USD 152.9bln in borrowing from the discount window as of March 15th from USD 4.6bln on March 8th and the Fed's other credit extensions rose to USD 142.8bln as of March 15th from zero on March 8th, while the Fed's balance sheet jumped to USD 8.69tln on March 15th from USD 8.39tln on March 8th which is the highest since November.
• Fed said it stands ready to provide liquidity through the discount window to all eligible institutions.
• Fed blocked the mention of regulatory flaws in the SVB rescue, while government officials wanted their joint statement to reference regulatory shortcomings they believed contributed to the demise, according to NYT.
• US Senators Sinema and Tillis led a bipartisan group of Senators questioning the Fed regarding its oversight of Silicon Valley Bank and urged the Fed to focus its internal review on how industry concentration within a bank's customer base could constitute a financial risk.
• White House will work closely work with Congress and regulators to increase supervision of the banking sector.
• Credit Suisse (CSGN SW) is being sued by shareholders in the US over a failure to disclose material weakness in internal controls and significant Q4 outflows.
• Charles Schwab (SCHW) clients pulled USD 8.8bln from its prime funds in 3 days, according to Bloomberg.
• US regulators confirmed that 11 banks announced USD 30bln in deposits into First Republic Bank (FRC).
• First Republic Bank said it had a cash position of USD 34bln as of March 15th, not including USD 30bln of uninsured deposits and said insured deposits from March 8th-15th have remained stable, while it noted that daily deposit outflows have slowed considerably and it suspended its common stock dividend, according to Reuters. It was also reported that banks' initial commitment to First Republic will be at least 120 days, according to Bloomberg.
• S&P affirmed the US at AA+; Outlook Stable, while S&P said US ratings are constrained by a high general government debt burden but the stable outlook indicates an expectation of continued resilience in the US economy.

APAC TRADE

EQUITIES

• APAC stocks were positive amid the improved global risk appetite after recent bank lifelines including the SNB liquidity backstop for Credit Suisse and with large US banks teaming up to deposit USD 30bln in First Republic Bank.
• ASX 200 was marginally higher with the index kept afloat amid outperformance in energy and as the top-weighted financial industry benefitted from the recent banking sector relief, although gains were limited by losses in real estate and the defensive sectors.
• Nikkei 225 made headway above the psychological 27,000 level with railway stocks among the top gainers, while automakers lagged at the opposite end of the spectrum.
• Hang Seng and Shanghai Comp. were in an upbeat mood as energy and tech spearhead the advances in Hong Kong and with Baidu eyeing double-digit percentage gains, while the mainland also benefitted from the PBoC’s continued liquidity efforts.
• US equity futures were rangebound and took a breather from recent advances heading into quad witching.
• European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.4% after the cash market closed up 2.0% on Thursday.

FX

• DXY was subdued amid the improved risk tone and despite the prior day’s rise in yields, while the Fed reported a jump in its balance sheet to its highest since November as banks rushed for liquidity amid the SVB collapse.
• EUR/USD continued to shrug off the recent dovish ECB hike and benefitted from the dollar weakness.
• GBP/USD strengthened after the 1.2100 level provided a stepping stone for price action.
• USD/JPY slightly eased back after yesterday’s advances which were spurred by the upside in US yields.
• Antipodeans gained alongside the constructive mood and with commodities on the mend.
• PBoC set USD/CNY mid-point at 6.9052 vs exp. 6.9017 (prev. 6.9149).

FIXED INCOME

• 10yr UST futures traded rangebound following the prior day’s bear flattening whereby the announcement of the large US banks’ support for First Republic Bank unwound the impact of a dovish ECB rate hike.
• Bund futures softened after having wiped out the post-ECB gains and retreated to beneath 136.00.
• 10yr JGB futures were subdued in sympathy with global peers and amid a lack of additional BoJ buying.

COMMODITIES

• Crude futures traded mildly higher as some of the banking sector fears were allayed although WTI crude futures remained beneath the USD 70/bbl level.
• OPEC+ delegates are reportedly still encouraged by Asian demand; Delegates largely blame the recent sell-off on speculative money leaving the derivatives oil market rather than weakness in the physical market, according to Bloomberg.
• US energy envoy Hochstein said US President Biden is committed to replenishing the petroleum reserve.
• Spot gold gained steadily overnight as prices benefitted from the weaker dollar.
• Copper futures clawed their way back from yesterday's trough and the lowest level since early January with the recovery facilitated by the improvement in risk sentiment following the bank lifelines.

CRYPTO

• Bitcoin rallied on risk appetite and surged above the 25,000 level to its highest since June.
• Citadel reportedly offered to buy Circle's SVB deposits that were backing USDC before regulators took control, according to WSJ.

NOTABLE ASIA-PAC HEADLINES

• China Securities Journal noted that the Chinese economy requires more fiscal and monetary support, as well as reiterated that the economic rebound is not yet solid.
• Japan's government and BoJ will hold a meeting on Friday evening after the SVB collapse, with the MoF, FSA and BoJ poised to exchange information on financial markets, according to Nikkei.
• Japanese Finance Minister Suzuki said Japanese financial institutions have ample capital base and liquidity, while the financial system is stable as a whole. Suzuki added they are closely coordinating with the BoJ and other central banks regarding responding to financial situations.

DATA RECAP

• Singapore Non-Oil Exports MM (Feb) -8.0% vs. Exp. -0.5% (Prev. 0.9%)
• Singapore Non-Oil Exports YY (Feb) -15.6% vs. Exp. -16.0% (Prev. -25.0%)

GEOPOLITICS

• US State Department approved the potential sale of hellfire missiles to Poland for USD 150mln.
• It was initially reported that Chinese companies were shipping rifles and body armour to Russia, according to Politico citing customs data. However, Pentagon spokesperson Ryder later refuted this and said that the US has not seen China transfer lethal aid to Russia.
• North Korea said its missile launch on Thursday was a Hwasong-17 ICBM which sent a warning to enemies and proved the capability to respond overwhelmingly if needed. North Korea added its launch was a response to US-South Korea military drills and its leader Kim called for boosting deterrence of nuclear war, while it noted the launch did not have any negative impact on the safety of neighbouring countries, according to NK News and KCNA.

EU/UK

• UK Chancellor Hunt abandoned plans for sovereign wealth funds to pay corporation tax on property and commercial enterprises, according to FT.
• ECB reportedly feared that ditching a half-point hike might panic investors, while sources noted that several hawkish officials still see the terminal rate well above the current 3%. However, some are questioning whether the peak in borrowing costs might now be lower than previously thought, according to Bloomberg.
• German Chancellor Scholz said he does not see the threat of a new financial crisis and the monetary system is no longer as fragile as it was before the financial crisis, according to Handelsblatt. It was also reported that Germany's Economy Ministry said a technical recession can now no longer be ruled out.
• French unions' spokeswoman said unions will continue to demand the withdrawal of pension reform and are calling for more strikes on March 23rd, according to Reuters.