Asia’s stock markets retained recent gains on Thursday as worries of a financial crisis subsided and investors considered if Alibaba’s break-up heralds the end of Beijing’s regulatory storm targeting digital businesses.
MSCI’s Asia-Pacific ex-Japan index climbed 0.2%. The S&P 500 (.SPX) rebounded from March lows after Silicon Valley Bank’s failure.
Global stocks (.MIWD00000PUS) will rise 4.9% quarterly. On Thursday, Japan’s Nikkei (.N225) fell 0.8% after a 6% quarterly rise. U.S. and European stock futures were stable.
With German, Spanish, and Italian inflation statistics expected later, calmer markets allow investors to focus more on economics.
Wall Street indices rose as the U.S. banks’ top regulator addressed Congress on Wednesday and focused on Silicon Valley Bank’s failings and oversight.
As investors reduced their positions in recent weeks, the U.S. dollar strengthened, notably versus the safe-haven Japanese yen.
The dollar traded at 132.59 yen.
As Silicon Valley Bank’s bankruptcy sparked worries of a financial crisis, bonds and huge tech businesses that profit from falling interest rates looked to have won.
Since markets have drastically re-priced rates, U.S. yields are below the Fed funds rate of 4.8% from the two-year to the 30-year.
Two-year rates fell 30 basis points, the first quarterly drop since March 2020.
Rate-sensitive Nasdaq (.IXIC) is up over 14% this year and poised for its best quarter in over two years.
“Bond markets have been dizzyingly unpredictable; U.S. bonds priced in rate cuts starting in June,” Barclays analysts noted in a quarter-end report.
“In times of actual panic, investors flock to the U.S. dollar, but in March, the euro surged against it. U.S. money markets and cross-currency swaps show no funding difficulties “they claimed.
“March saw a major economic setback. This is only a bump.”
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