The SVB debacle, which is hammering regionals on concerns about plunging bond prices, will not be contagious for larger peers, says the Wall Street institution.
Markets are in a bit of a funk again. To the tension generated by recently surging bond yields and a looming jobs report, we can add a seemingly old fashioned bass-slapping wobble about bank contagion.
Does this mean traders think the funk is U.S.-centric and should thus damage the dollar? Or does it imply we are not anywhere near George Clinton levels of planetary funkiness and so a rush to the greenback is not required?In a note published late Thursday, the bank said problems illustrated by SVB are “idiosyncratic, not systemic.”
“[W]hile the banking sector does make up a large share of the USD IG market at 25% of the notional outstanding, regional domestic banks only make up 6% of the banks sector, or about 1.5% of the broader USD IG market.” “I think this indiscriminate bank selling is overblown and is the result of Great Financial Crisis-scars,” he says.
The buzz It’s Jobs Friday again – delayed a week because last week March crept up a bit fast for some! Economists forecast a net 225,000 net positions were created in February, down sharply from January’s astounding 517,000 gain, but still probably too robust to be compatible with the Fed’s desire to damp inflation.
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