Bond Traders to Scour Bank Results for Signs of Increased Stress
- Lenders in focus to gauge recession risks, need for rate cuts
- Markets fully price hike by June, then pivot to cuts
A pedestrian passes an M&T Bank branch in West Hartford, Connecticut.
Photographer: Joe Buglewicz/BloombergThis article is for subscribers only.
Bond investors will pay a lot more attention than usual to the latest US quarterly bank results as they assess the potential hit to economic growth from any slide in lending.
A swath of regional lenders are set to report earnings next week, giving traders a key insight into the health of the industry and its willingness to make loans following the collapse of Silicon Valley Bank. Volatility has gripped the $24 trillion Treasury market ever since, with daily gyrations of 20 basis points in the two-year yields — the most sensitive to interest-rate policy — now commonplace in a market plagued by changing views on the Federal Reserve’s path.