13 March 2023

FED, labour market and Silicon Valley Bank shake up markets

A week of great volatility in the financial markets, which began with the statements by Fed Governor Powell on the possibility of further interest rate hikes and then continued with two ‘blows’ on Friday: on the one hand, the US labour market, which continued to grow in February, albeit without increasing pressure on wages; on the other hand, the rapid closure of the Silicon Valley Bank, which worries investors about a possible contagion risk. Let’s take a look at some data from our weekly analyses.

Compounding the Silicon Valley Bank affair, our risk-on risk-off analysis signals a strong return of concern in the financial markets, with cash and gold leading the valuations in the global analysis.

In the past week, 25 per cent of the instruments and indices used for our analysis experienced a positive change. 73% experienced a negative change. Analysing by macroclass, 10% of equity instruments and indices recorded a positive weekly change. 89% of bond instruments and 33% of the other asset classes used for our analysis.

Improving valuations in the past week accounted for 41% of the total. The previous week, valuations that had been adjusted upwards were 28% of the total.

Among the equity analyses, improving valuations accounted for 36% of the total.

Among the analyses for bonds, 56.25% of the total were upgraded valuations.

Among analyses of other asset classes, improving valuations accounted for 65% of the total. This section included both sentiment analyses and analyses of currencies and commodities.

Of the valuations, 31 per cent were above average in the short term. 32% were above the long-term average for valuations. Last week it was 25% for both averages.