- Asian equities rose after a bailout package for First Republic Bank fueled a rally in US stocks. Bond yields in the region have risen as investors continue to assess the likelihood of further interest rate hikes.
- Stocks rose in Hong Kong, Japan, and South Korea, but an Asia equity index was set for a second weekly loss following the recent banking sector turmoil.
- Contracts for the euro rose, while those for the S&P 500 and the Nasdaq 100 remained unchanged. The S&P 500 rose the most in a single day since January after the largest US lenders agreed to contribute $30 billion in deposits to First Republic, easing speculation that the bank would be the next to fail after two high-profile failures sparked the crisis last week.
- Bond yields for Australia's policy-sensitive three-year maturity rose by about 15 basis points and they were also higher in New Zealand. The two-year Treasury yield increased by about three basis points on Friday, after rising by 27 basis points to above 4% the previous session. Traders who had largely abandoned bets on a ninth Fed rate hike next week on Wednesday increased their odds of a quarter-point increase to around 80%.
- The dollar fell slightly, with the yen and the Australian dollar outperforming their Group of 10 counterparts.
- Markets were also digesting the European Central Bank's 50 basis point rate hike and comments from the ECB president that inflation is expected to remain too high for too long. The ECB rate hike increased bets that the US Federal Reserve will also raise rates next week.
