Treasury yields are little changed following a quiet overnight session, a welcomed sight for volatility-wearied investors. Bank liquidity concerns, at least from a market perspective, seem to be cooling, although the KBW regional bank stock index (KRX) remains down 20% on the month (-23% MTD on 3/23). The ECB’s Isabel Schnabel said that eurozone banks have not experienced material deposit outflows, but they’ve seen “some shift from overnight deposits to time deposits.” According to the Wall Street Journal, the White House plans to recommend tougher liquidity and capitalization requirements for midsize banks, particularly those in the $100 billion to $250 billion asset range. The new rules would also likely require more stringent annual stress tests, similar to what the largest U.S. banks already face. On the data front, initial jobless claims held below 200,000 once again last week (198,000), and the third estimate of Q4 GDP was revised down to 2.6%, including a 40 basis point downward revision to personal consumption to 1% (first estimate was 2.1%). The February PCE report will be released tomorrow morning.
Jason Haley
Chief Investment Officer
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