Regional Banks In Focus After Busy European Session

Softer than expected Chinese inflation and credit data added further evidence to the mixed recovery re: the economic rebound in the world’s second largest economy, which will heighten calls for deeper Chinese policy easing, Meanwhile, digestion of some incrementally dovish commentary from ECB’s Villeroy and the late NY rally in the front end of the U.S. Tsy curve boosted European bonds, generating a fresh incremental bid in Tsys as London trading got underway.

• A move higher in ECB consumer inflation expectations data then took the edge off the bond richening, before fresh worry surrounding PacWest deposit flight applied pressure to equities and crude oil futures, supporting Bonds.
• The risk-off moves then moderated from extremes as BBG headline noted that the FDIC will make an announcement on the deposit insurance fund later today. The meeting gets underway at 10:00 NY/15:00 London, with the FDIC noting that they'll consider a proposal to impose "special assessments on banking organizations to recover the losses arising from protecting uninsured depositors of the former SVB and Signature Bank," which seems to have taken some of the post-headline jubilation away from markets.
• The BoE delivered the widely expected 25bp rate hike and left its guidance unchanged, which, when coupled with the Bank’s latest set of economic projections, biased market pricing of the BoE rate path higher at the margins and has resulted in Gilt underperformance.
• PPI and weekly jobless claims provide the highlights of the NY data docket, while Fedspeak from Waller & Kashkari, as well as ECB speak from Lagarde, Schnabel, de Guindos & de Cos will be heard.