End Of Day Report March 14th

HIGHLIGHTS

- US officials say about 75% of Russian seaborne oil is being sold outside the price cap, according to Bloomberg
- US Core CPI MM, SA* (Feb) 0.5% vs. Exp. 0.4% (Prev. 0.4%)
- US CPI YY, NSA* (Feb) 6.0% vs. Exp. 6.0% (Prev. 6.4%)
-  US Real Weekly Earnings MM* (Feb) -0.4% (Prev. 0.7%, Rev. 0.3%)
- Meta (META) expects to reduce team size by around 10k employees; expect to announce restructurings and layoffs in tech groups in late April, and then business groups late May; cuts FY23 
  expenses view
- German Regulator Bafin says so far it has no indications that bank customers are shifting their deposits
- US military confirms a Russian fighter jet struck the propeller of a US military Reaper drone, forcing the US to bring it down over the Black Sea
- Franklin Templeton's Head of European Fixed Income is betting against interest rate risk and expects US banking issues to have "muted impact in Europe" Says Central Banks, especially ECB, 
  will keep hiking
- S&P says First Republic Bank's (FRC) 'A-' rating has been placed on credit-watch Negative on funding profile risk; believe that its deposit flows have been volatile following government's closures of two banks
- FBN's Gasparino citing bank CEOs tweets "Fed is likely to tighten another 25bps despite sentiment Powell will hold amid SBV implosion/lower inflation due to 6% CPI still too high & holding 
  rates would be an indication of serious systemic flaws in the bank
- US House GOP says US should guarantee all US bank deposits, according to Politico
- Russian Defence Ministry says Russian fighters did not use on-board weapons and did not come into contact with an American drone; says drone went into uncontrolled flight with loss of 
  altitude and collided with water surface, according to TASS and RIA Says US drone flew over the Black sea in the direction of the Russian border with its transponders turned off.
- Saudi Energy Minister reiterates that the only course of action in such an uncertain environment is to maintain the agreement OPEC struck last October for the rest of this year and that is 
  what we intend to do (as WTI closes at its lowest level of the year) - Energy Intel interview

SUMMARY

Regional banks posted big gains on Tuesday as they regained their footing after huge losses in the previous session, but volatility continues.
Moves by the federal government to backstop uninsured bank deposits seemed to finally sink in. Meanwhile, Moody’s Investors Service on Tuesday downgraded the U.S. banking system to negative from stable. The rating agency said the move reflects “the rapid deterioration in the operating environment” following deposit runs and failures of Silicon Valley Bank, Signature Bank and Silvergate Bank.
All of this is posing an interesting challenge for the Federal Reserve. On one hand, you have a very delicate banking/financial system, whilst on the other, prices rising a lot faster than the Fed are comfortable with. 
Excluding volatile food and energy costs, so-called core prices rose 0.5% in February, slightly above January’s 0.4% gain a gauge the Fed pays particular attention to.