US stocks surge on First Republic rescue talks

The local currency was 0.6 per cent higher; the Bloomberg dollar spot index edged 0.3 per cent lower.

On bitstamp.net, bitcoin was up 2 per cent to $US24,963 near 7.40am AEDT.

The yield on the US 10-year note was 12 basis points higher to 3.58 per cent at 4.41pm in New York.

America’s biggest banks are close to agreeing upon a plan to deposit about $US30 billion ($45 billion) with First Republic, Bloomberg reported. Details of the rescue, which are still being worked out, may be announced as soon as Thursday, it also reported.

“Sounds like an industry effort to establish a fire door, lowering contagion risk,” Mohamed El-Erian said in a tweet.

The move came after Swiss authorities moved swiftly to shore up Credit Suisse; shares in the bank rebounded 19 per cent.

Separately, the European Central Bank lifted interest rates as it had said it would despite the global banking tumult.

Today’s agenda

No local data

Overseas data: US February industrial production, leading index and March consumer sentiment

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Market highlights

ASX futures 27 points or 0.39 per cent to 7012 near 7.40am AEDT

• AUD +0.6% to 66.58 US cents
• Bitcoin +2% to $US24,963 near 7.40am AEDT
• On Wall St: Dow +1.2% S&P +1.8% Nasdaq +2.5%
• In New York late: BHP -1% Rio -1.7% Atlassian -0.4%
• Tesla +2% Apple +1.9% Amazon +4% Alphabet +4.7%
• Credit Suisse closed up 19.2% in Swiss trading
• In Europe: Stoxx 50 +2% FTSE +0.9% CAC +2% DAX +1.6%
• Spot gold +0.1% to $US1919.54/oz at 2.40pm in New York
• Brent crude +1.3% to $US74.66 a barrel
• Iron ore -2.6% to $US128.80 a tonne
• 10-year yield: US 3.58% Australia 3.33% Germany 2.28%
• US prices as of 4.41pm in New York

United States

Treasury Secretary Janet Yellen said that her department is monitoring for a potential contraction in credit in the US following the collapse of Silicon Valley Bank, which sparked the danger of contagion across the banking system.

Speaking at a Senate Finance Committee hearing Thursday, Yellen told lawmakers that she had first heard of problems with SVB just one day before it was put into Federal Deposit Insurance Corp receivership last Friday.

Noting the bank’s high reliance on uninsured deposits for funding, she said regulators must “reexamine our rules and supervision and make sure they’re appropriate”.

Regulators intervened “because of the recognition there can be contagion in situations like this and then other banks can then fall prey”, Yellen said in answering questions before the panel. The Treasury is now monitoring a wide range of indicators to gauge how lenders are reacting, she said.

“A more general problem that concerns us is the possibility that if banks are under stress, they might be reluctant to lend where they’re worried about shoring up liquidity and capital,” the Treasury chief said. “And we could see credit become more expensive and less available.”

Morgan Stanley sees rising risks of a ‘hard landing’ for US economy Funding costs are set to rise as a result of the banking crisis and that is poised to further check the US growth as the year progresses.

Commodities

The European Union unveiled a raft of new measures aimed at nurturing green tech and securing raw materials as it seeks to keep its place in the race with the US and China amid growing global protectionism.

The European Commission presented goals to ramp up the processing of key metals in Europe, measures to make green-energy investments easier, and incentives for renewables and carbon-capture.

Its Net Zero Industry Act aims to keep clean tech manufacturing within Europe with a 40 per cent target for key sectors like solar panels and batteries by the end of the decade.