- Markets rose following days of fear that a stalemate in Washington would force the US into an unprecedented default, fueling hopes that the world's largest economy can also avoid an economic slump.
- After a surge on Wall Street, European equities climbed as optimism grew for an eventual breakthrough in discussions to boost the debt limit before coffers run dry around June 1st. S&P 500 futures indicated another day of gains for the index, as US regional lenders maintained their momentum in premarket trade, with Western Alliance up 2% and PacWest up 6%.
- The improved mood reflects both progress in Washington and good news from troubled US regional lenders. Bank stocks rose this week as Western Alliance reported a rise in deposits, relieving concerns that the industry might succumb to bond losses and depositor flight. Taken together, they are sustaining confidence that the United States will avoid a recession and paving the way for soft-landing bets following one of the most aggressive Fed tightening cycles in history.
- The CBOE VIX index of equity market volatility, which dipped below 17 to close at its lowest level since the beginning of the month, reflected bets on a relief rally.
- Global oil demand increased by 3 MB/D MoM in March to highest level ever registered by Jodi-reporting countries - IEF citing Jodi.
- BoE's Ramsden: UK gilts may still carry some risk or liquidity premium as a result of last year's LDI issues.
- WTI futures were trading above $72, having risen nearly 3% on Wednesday after Biden voiced confidence that negotiators would reach an accord to avert a catastrophic default. The dollar index climbed, helping to keep costs under control.
