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USD, Equities See Modest Rebound from Post-Fed Lows

  • Global equities are mixed/lower this morning, with sentiment shaken by the plunge in PacWest and other US regional banks after-market as the bank said it is exploring a sale or capital raise. European and US equity futures have recovered from intraday lows, mirrored by Brent, which modestly bounced off 71.28$/bbl
  • Pressure on the greenback following the Fed decision extended overnight to see EURUSD trade to a high of 1.1092, 3 pips shy of key resistance at 1.1095 – the April 26 high. However, the USD has slowly started to pare its losses as renewed banking concerns weigh on market sentiment.
  • In EM, HUF and ZAR stand out as the day’s strongest currencies whereas PLN lags. Strength in CZK has persisted following the CNB's hawkish policy statement yesterday.
  • The ECB decision is the highlight going forward. A 25bps hike is expected with recent inflation data and banking sector worries diminishing the case for 50bps. Further out we have Initial Jobless Claims and Trade Balance data in the US.

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