Stocks reversed a loss on prospects the US government would backstop the banking sector. The bid in equities started after US Treasury Secretary Yellen said she would convene an unscheduled private meeting of the Financial Stability Oversight Council Friday morning. Following a 1% slide earlier in the trading day, the S&P 500 reversed course as a gauge of regional banks climbed, with Citizens Financial Group Inc. and Zions Bancorp gaining amid assurances from authorities about the financial sector and growing speculation that central banks will have to stop raising rates to prevent a recession. The selloff began as Deutsche Bank became the latest focus of the turmoil as concern about the industry sent its shares slumping the most in three years. The rebound in European shares ignited after European Central Bank President Christine Lagarde told European Union leaders that the region’s banking sector is strong, according to people familiar with the matter.

Treasury 2-, 5- and 10-year yields sank to the lowest levels this year and German two-year rates tumbled over 30 basis points before recovering. US swap rates linked to policy meeting dates ramped up bets on rate cuts beginning in June. The 2-year yield was 6.6bps lower at 3.77% whilst the 10-year was down 5bps to 3.38%.

The Bloomberg dollar spot index strengthened for the first time in seven days as a selloff in Deutsche Bank shares led to risk aversion and three Fed officials stressed the need to curb inflation. The Bloomberg Dollar Spot Index is up 0.4%; for the week, it is down 0.8%, biggest loss in three weeks but is stronger against all its G-10 peers except the yen Friday.

• USD/JPY down 0.1% to 130.75
• AUD/USD fell 0.5% to 0.6648
• NZD/USD fell 0.8% to 0.6198
• EUR/USD fell 0.7% to 1.0759

Oil rose last week, but options and futures markets still showed increasingly downbeat wagers. WTI fell lower on Friday by 1% to $69.26 a barrel. Copper dropped 1.1% to $4.10/lb and gold lost 0.8% to $1,977/oz.

Daily market analytics by,

Lenny Hayes

Chief technical officer

Daily market analytics by,

Lenny Hayes

Chief technical officer