Before the collapse of SVB, signs the Federal Reserve was nearing the end of its rate hiking cycle would have been cause for the market to put on its party hat and set off some fireworks.
AJ Bell investment director Russ Mould said: โNow everyone is feeling a little bit edgy and the shift in tone from the Fed to โsome policy firming may be appropriateโ from the previous line of โongoing hikesโ has just led to more uncertainty and concern the Fed sees further vulnerabilities in the financial system which are still to be tested.
โIn other words, this is no-oneโs idea of the soft landing investors were hoping for when stocks made a big recovery around the turn of the year.
โIt is the Bank of Englandโs turn later on and it finds itself in even more of a bind than the Fed, potentially because the latest inflation data confounded expectations with an increase. Can it treat this reading as noise, driven principally by a surge in the cost of salad and vegetable produce thanks to poor growing conditions in Spain and Morocco?
โWeโve moved from a situation where there was at least a measure of clarity from central banks to one where even they must be second guessing themselves.
โBanking shares slid, which didnโt help sentiment, as any kind of blanket insurance for bank deposits in the US was ruled out. It appears there could be further to go in the regional banking crisis in the US.
โA better period for the cryptocurrency world, with bitcoin enjoying some strong gains, was interrupted by news the US regulator is threatening to sue crypto exchange platform Coinbase over some of its products.โ
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