Market Overview
– US authorities announced the take-over of the First Republic Bank by JP Morgan Chase. The deal includes credit line support and assistance for security losses, from the FDIC. This follows the collapse of UBS and SBV on respective sides of the Atlantic. It is the biggest bank failure since the GFC.
– The FOMC meeting this week will decide on whether the Fed will continue to raise rates. They have indicated this may be the last rate rise before they hit the ‘pause button’ to assess the impact of previous rate rises. The important PCE inflation indicator revealed continued and stubborn inflation in the US economy.
– The RBA will announce their latest interest rate decision today. They hit the pause button at the last monetary policy meeting and may continue this pause? Look for a more hawkish narrative, if they do resist the temptation, to resume rate rises.
– The ECB will also announce their latest policy on interest rate rises this week and they are expected to raise rates. German and European inflation levels are extremely high and imposing extreme economic hardships on the consumer.
– US Employment and the Labour market will come into focus during the coming week with a series of reports set to be released. The Jolts Job Reports, will be followed closely by the Challenger and ADP Private Sector Jobs report. The week will culminate in the all-important Non-Farm Payroll number and the US Unemployment number out Friday.