Deal or no deal? Global M&A activity fell to its lowest level in over a decade during Q1 2023. Factors such as increasing interest rates, high inflation, and concerns about a possible recession appear to have been major considerations for corporations, contributing to the significant drop. M&A volumes dropped by 48% to $575 billion compared to the same period in the previous year. A banking crisis that originated in the US with Silicon Valley Bank and extended to Europe with Credit Suisse Group's sale to UBS Group, as well as market volatility, were the main reasons for the decline. Fred also reported that the net U.S. acquisition of financial assets, excluding financial derivatives, for Q4 2022 is at almost its lowest level since the 2008 subprime crisis. This sector of the economy is expected to shrink further as money printers stay unused in the basement.

EQUITY

The US stock market gapped on the upside with a tech share rally but was undermined by shares in regional US banks after the Biden administration proposed stronger guidelines to manage risks. Both GDP and jobless claims come under expectations, and the market is focused on the PCE price index as the main data point assessed by the Fed to determine rates.

GOLD

Gold rose by 0.8% in a consolidation move for the week after an aggressive bull run amid a potential banking crisis that now remains uncertain. Investors anticipate a less hawkish Fed in conjunction with higher jobless claims and uncertainty around the upcoming PCE price index.

OIL

Oil prices were steady on Friday as Chinese PMI data showed mixed signals on demand while investors awaited the direction of the OPEC meeting. Supply disruptions in Iraq and lower US inventories pushed the prices higher on Thursday.

CURRENCY

The US dollar has fallen against the euro due to easing inflation in Germany and reduced concerns over the banking sector. The pound has also gained strength against the dollar as well as most Asian currencies. The market expects a lower PCE price index as the CPI reported lower February data.