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US Banking Crisis Swamps Other Considerations
The US banking crisis has overwhelmed other market drivers. The strong measures announced as Asia Pacific trading got under way was embraced by the market even though moral hazard issues and gaps in the Dodd-Frank regulatory framework were exposed. The dollar is trading heavily. The prospect of a 50 bp Fed hike next week has evaporated and some are doubting that a 25 bp increase will be delivered. Rate hike expectations for the ECB this week and the BOE next week have been shaved, and the market now favors the RBA to join Canada in pausing as early its meeting next month. Outside of China, Hong Kong, Taiwan and South ... (full story)