Tuesday 2, May 2023
First Republic Bank falls into Jamie Dimon’s clutches
We have the usual hysterical reaction to a bank failure. As usual, commentators are saying that the Fed will have to pivot. The reality is that the 10Y US yield went down 14bp: hardly falling off a cliff! DXY went down 21bp. So far, the world has taken this latest bank failure at face value. There was some evidence that the job market is weakening: quits were down, but still high by historical standards. The fact is that nobody knows anything, and we are all waiting.
Bond prices are manipulated, so it’s always worth looking at equities and commodities too. Equities were off by around 1%, crude by >5% (although after a recent strong run).