Market Insights: 06/04/2023

“You think you understand ‘one’, you must also understand ‘two’, because one and one makes two. But you must also understand ‘and'”


This 12th century mystic poet may well have written the above quote on behalf of the uncanny Mr. Market, “the wisdom of crowds1”, because who could have conceived that amid a banking crisis, the aggregate value of financial assets will increase (Chart 1).

As two US large regional banks and an EU GSIB failed, the fear of contagion not only propelled Central Banks to take prompt action but also helped ease the perceived risk of policy overtightening. Heads I win, tails I win moment for financial markets?

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