- Following days of turmoil in US regional bank stocks, markets are returning to normalcy as investors seek out bargains.
- The focus has moved US jobs report and expectations that the Federal Reserve would begin to decrease interest rates in reaction to tightening lending conditions. Swap contracts now show a one-in-two chance of a cut as soon as July.
- In premarket trading, PacWest jumped as much as 6% while Western Alliance gained 15%. Both firms fell this week, pulling the S&P 500 down for four days in a row, as investors worried about rising banking system stress.
- Solid earnings further boosted investor confidence. Apple rose as iPhone sales exceeded expectations.
- ECB's Villeroy: There will likely be several more hikes, but we have done the essential.
- The ECB sees 2023 GDP growth at 0.6% and 2024 growth at 1.2% - ECB Survey of Forecasters.
- ECB sees 2025 inflation projected at 2.2% vs 2.1% seen earlier; longer-term unchanged at 2.1%
- ECB sees 2023 inflation at 5.6% vs 5.9% previously; 2024 at 2.6% vs 2.7% - ECB Survey of Forecasters.
-ECB's Simkus: Thursday's rate increase wasn't the last.