- On Tuesday, as investors awaited inflation data that could contradict expectations that the Federal Reserve is finished tightening monetary policy, Treasury rates increased following steep drops and US equities futures increased.
- The two-year Treasury yield, which is the most sensitive to interest rates, increased by around 25 basis points to 4.25%, which is still significantly lower than it was at this time last week. Yesterday, when the yield fell more than a half percentage point in the largest movement since the 1980s, falling rates attracted Wall Street's attention. The 10-year yield increased by four basis points to 3.60%, while the dollar index reversed three days of declines.
- S&P 500 and Nasdaq 100 futures increased by roughly 0.4% as premarket trading saw a surge in regional banking stocks. First Republic Bank stock increased as much as 20% after falling by a record 62% on Monday. The bigger lenders Bank of America and Wells Fargo both had gains of more than 3%.
- Bonds and banking stock prices have recently fluctuated as speculation has grown that the Federal Reserve may stop raising interest rates and even consider cutting them in order to stabilise the financial system after Silicon Valley Bank and two other US lenders went down. A high reading on inflation later today, though, might cloud that forecast and bring on a new round of volatility in the fixed-income markets.
- Credit Suisse has found material weakness in financial reporting.
- Traders price fewer than 50bps of ECB hikes through May.