World prices rose this Wednesday, March 29, as investors took heart from a greater level of stability in the financial sector, but the sense of optimism did not affect safe-haven assets such as bonds or gold stocks.
Meanwhile, shares in Asia rose after Chinese conglomerate Alibaba’s plans to split into six units boosted its technology portfolio.
The sale of assets at Silicon Valley Bank (SVB), a regional lender that went under a month ago, helped boost investors’ risk appetite. Other measures of market stress are easing, boosting equities, cryptocurrencies and commodities over the past two weeks.
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MSCI’s global stock index gained 0.3%, while European shares rose 0.92%, thanks in part to further bank shares after UBS said Sergio Ermotti would be promoted to lead the company.
The economic context is healthier than it was six months ago and, despite some parallels with the 2008 financial crisis, the current problems in the banking sector now seem more contained. However, with the outlook for global interest rates uncertain, the mood is one of panic.
“Sentiment is currently unstable and the market will be prone to swings,” said Kallum Pickering, Berenberg’s chief financial officer.
Concerns about inflation have led investors to tighten monetary expectations from major central banks, including the European Central Bank and the Federal Reserve. The market will now leave the price of the case H unchanged at its next meeting at 60%.
S&P D e-mini futures are up 0.92%, suggesting a soft start to trading later on Wall Street.
Yields on US Treasury bonds were falling. The benchmark 10-year yield was down 3 basis points, to 3.539%, and the two-year note was down 6 basis points, to 4.006%.
