Morning Brief – Euro stocks in focus

European investors are set to open in the red today as investors and traders are still waiting for verbal reassurance from the European Central Bank, which may not come until Thursday when it next meets to set interest rates.

Stocks markets in the UK and the eurozone are vulnerable until that assurance comes as it is still unclear how many unrealized losses EU and UK banks are carrying on their books.

The Federal Reserve made a guarantee on deposits and noted that they will also make additional funding available for eligible financial institutions to prevent runs on similar banks in the future.

US banks are currently sitting on $620 billion in unrealized losses, while banking assets that have decreased in price but have not been sold yet according to most data report.

Attention is now turned to San Francisco-based First Republic Bank after its shares fell starkly Monday in the wake of Silicon Valley Bank’s shutdown, which marked the largest US bank collapse since the 2008 financial crisis. 

Shares in First Republic fell by more than 60 percent, putting it among a number of regional banks. This was the very reasons why US authorities made the move to prevent more bank runs and to help companies that deposited large sums with the banks to continue to make payroll and fund their operations.

Fear is still in the market Asian equity markets, probably due to fears over banks in the USA and Europe still. Japan’s Nikkei 225 traded down by -1.9%, while Australia’s S&P/ASX 200 lost-1.5%.

On the data front the focus was the Australian February Business Survey from National Australia Bank. Confidence dipped back into net pessimism, but business conditions remained very solid indeed.

Weekly and monthly consumer confidence readings remained very weak. The monthly is stumbling along close to 30-year lows. Traders are awaiting US inflation data due later today, 8.30 am US Eastern time.