Mar 30, 2023
The Daily Chase: Markets point to a positive open; Bank of Canada reiterates banking system support
First Look With Surveillance: Market Swings, ECB Dilemma
North American equity markets are pointing to further gains at the open, looking to build on yesterday’s strong showing across the board. Equity market futures south of the border are all up around half a per cent at present, as investors weigh easing concerns over the structural integrity of the global financial system and the potential for higher rates. As for today, we’re going to have plenty of Fedspeak to chew on, with Boston Federal Reserve president Susan Collins, Richmond Fed president Thomas Barkin and Minneapolis Fed president Neel Kashkari are all slated to speak in the afternoon.
BANK OF CANADA READY TO ACT IF BANKING TURMOIL SPREADS
Sticking with that central bank theme, the Bank of Canada is reiterating that it’s prepared to step in to support the financial system if the banking woes south of the border spill into Canada. Speaking in Montreal yesterday, deputy governor Toni Gravelle said the domestic banking sector remains strong and that financial markets continue to function normally, but that the central bank is ready to act if those conditions change. Canada’s banking sector is structurally different from that of the U.S., with the more diversified oligopoly better insulated from sector-specific shocks than the U.S. regional banking system.
YELLEN POISED TO CALL FOR TIGHTER BANK RULES
U.S Treasury Secretary Janet Yellen is reportedly set to call for tighter banking rules in the wake of the twin collapses of Silicon Valley Bank and Signature Bank. The Wall Street Journal is reporting Yellen will argue that the recent turmoil is reflective of altogether too lax standards for the banks and that further efforts are needed to underpin financial stability. However, the WSJ does say Yellen plans to praise mitigation efforts that helped stop the contagion risk stemming from those two banks.
OTHER NOTABLE STORIES
- We’re awaiting the latest results out of BlackBerry after today’s closing bells, and the focus will likely be centred around the company’s view of how things are going to shake out in the year ahead (BlackBerry released preliminary results earlier this month – the results were ugly, in particular on the cybersecurity side as government contracts were delayed.)
- CAE is striking a deal with Aegean Airlines – Greece’s largest flight operator – to form a JV to establish the first advanced flight training centre in Greece.
- Electronic Arts is planning to cut about six per cent of its workforce and take up to US$200 million in restructuring charges in the wake of a tough year for the video game industry.
- Notable data: Survey of Employment, Payrolls and Hours, U.S. Initial Jobless Claims, U.S. Real GDP
- Notable earnings: BlackBerry