Equities up, bonds confused, as Fed meets | MarketTalk: What’s up today? | Swissquote

Show notes

Bank stocks had a volatile session on Monday. UBS lost up to 16% after the Credit Suisse deal, but closed the session more than 1% higher.
In the US, JP Morgan, Goldman Sachs and Morgan Stanley closed the day with 1 to 2% of gains. The regional US banks also had a calm session, except for the First Republic Bank - which plunged 47% after a second credit downgrade in just a week from S&P.
In bonds, the announcement of full write-down of Credit Suisse’s AT1 bonds got bond investors confused, as equities should be written down before any other paper in the ‘bonds’ category. Authorities said that equities will be written down first to end confusion.
The Federal Reserve (Fed) begins its two-day policy meeting today in the middle of a storm.
If the European Central Bank (ECB) decision serves as a cheat sheet, the Fed could hike by 25bp and say that it has tools to inject liquidity in the system to contain crisis.
Investors are also focused on what the Fed will do with the Quantitative Tightening (QT
This morning, activity on Fed funds futures assesses a 75% chance for a 25bp hike.
The US dollar index slipped below the 50-DMA yesterday on expectation that the Fed will stay cautious at this week’s meeting given the turmoil across the financial place, while gold traded above the $2000 psychological mark on Monday, but improvement in sentiment could rapidly pull the price of an ounce to $1900 mark.
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