Chances for a Positive End of the Week
17 March 2023
On Thursday, we finally saw a proper bullish reversal on indices, with the SP500 climbing above the downtrend line, the DAX bouncing off the 14800 support, and the Dow Jones forming a bullish engulfing pattern on the daily chart. This is great news for buyers.
In American news, attention was on First Republic Bank, which is perceived as the next candidate to collapse. However, banking giants like JP Morgan or Morgan Stanley are expected to support the bank with additional cash, protecting it from going under. While this shows how sick the system is, American regulators will do everything to protect the banking sector from bankruptcy.
In Europe, the ECB announced an expected 50bp rise to 3.5%. It was interesting to see whether the bank would raise rates despite the ongoing situation. The SNB saved the day by helping Credit Suisse with $50 billion. If the SNB had not intervened, there would have been no interest rate rise in Europe. Today's calendar is empty, except for the Prelim UoM Consumer Sentiment from the US, which is expected to decline to 66.9.
The better mood triggered a correction on the American dollar, which has been gaining as a safe-haven currency in recent days. Interestingly, gold is not giving back its gains and still trades at high levels, while oil remains in a negative long-term sentiment, despite a possible positive correction.