Palladium declines amid concerns in the global markets
Palladium prices fell on Tuesday amid growing concerns in the global markets about banks.
Acquisition
After a crisis that lasted several days, the Swiss National Bank intervened to provide liquidity of up to 50 billion francs to rescue Credit Suisse, which then was acquired by UBS Bank.
It was a deal valued at 3 billion francs, with UBS carrying losses of over 5 billion francs.
The SNB lauded the deal and opened taps for upwards of 100 billion francs of liquidity.
The Fed
Fed Chair Jerome Powell welcomed UBS's acquisition of Credit Suisse for 3 billion francs, in a deal to aims to restore stability to the banking sector.
After several days of the crisis, the Swiss National Bank intervened to offer liquidity of up to 50 billion francs to support Credit Suisse, which entered into intense negotiations with its main Swiss competitor UBS that ended in the acquisition deal.
The Fed is meeting this week to decide on policies, with most analysts expecting a 0.25% rate hike, but the Fed might surprise us and hold rates flat to calm the markets.
The dollar index fell 0.1% to 103.2 as of 15:51 GMT, with a session-high at 103.5, and a low at 103.0.
On trading, palladium futures due in June fell 0.8% to $1,390 an ounce as of 15:51 GMT.
Oil prices climb 2.5% as banking concerns recede
Oil prices rose 2.5% in European trade, moving off 15-month lows for the second session as concerns about the global banking concerns subside.
Prices were also boosted by dollar's decline ahead of the Federal Reserve's policy meeting, expected to end with another rate hike.
Global Prices
US crude rose 2.5% to $69.49 a barrel, while Brent added 2.4% to $75.34 a barrel.
On Monday, US crude rose 2.3% away from 15-month lows at $64.41, while Brent climbed 1.7% to $70.17 a barrel off December 2021 lows.
Subsiding Banking Concerns
Market sentiment was boosted after UBS's acquisition of Credit Suisse in a 3 billion franc deal.
Major global central bank, led by the Federal Reserve, banded in vowing to provide enough liquidity to support the banking system.
OPEC+
OPEC+ ministers will convene on April 3, with a possibility of changing production recommendation.
However, it's likely that OPEC+ will wait out the global turmoil before taking an action to support the market.
The Dollar
The dollar index fell 0.3% today, sharpening losses for the fourth session and hitting five-week lows at 103.02 against a basket of major rivals, underpinning dollar-denominated oil futures.
The dollar is dipping as haven demand declines on the greenback, and ahead of the Fed's policy meeting, expected to end with the last US rate hike this year.
American Petroleum Institute
Initial data on US crude stocks will be released later today from the API, expected to show a buildup for the second week in a row.
Dollar sharpens decline to five-week lows ahead of Fed's meeting
Dollar fell in European trade against a basket of major rivals, sharpening losses for the fourth straight day and plumbing five-week lows as haven investments in dollar slowed down while positive appetite reigned in the market following UBS's acquisition of Credit Suisse.
The decline comes ahead of the Federal Reserve's policy decisions and amid extensive efforts from US authorities to protect the banking system in the country following the collapse of the Silicon Valley Bank and two smaller ones.
Markets still widely expect the world's largest central bank to increase interest rates by 25 basis points to contain inflation.
The Index
The dollar index fell 0.3% to 103.02, the lowest since February 14, with a session-high at 103.51.
The index lost 0.5% yesterday, the third loss in a row as haven demand slowed down following the historic Swiss banking deal.
In the largest bank acquisition since 2008, UBS Bank agreed to buy Credit Suisse with Swiss government mediation to contain the confidence crisis developing currently in the global banking sector.
UBS will pay 3 billion francs for Credit Suisse in a complete deal that includes extensive government guarantees.
The Fed
The Federal Reserve started its two day policy meeting today with decisions coming tomorrow, with most analysts still expecting a 0.25% rate hike.
It's likely the Fed will try to find a meddling ground between combating inflation and supporting the wobbly banking system in the US.
Fed Rates
Markets are pricing a strong 78% chance for a 0.25% rate hike, with only a 22% chance of no change in policies.
