Blog — 4 Apr, 2023
Insight Weekly: Banking liquidity crunch; G-4 growth picks up; battery-makers turn to iron
By Sarah Cottle
Today is Tuesday, April 04, 2023, and here’s your weekly selection of essential intelligence on financial markets and the global economy from S&P Global Market Intelligence. Subscribe to be notified of each new Insight Weekly.
In this edition of Insight Weekly, we keep the spotlight on the liquidity crunch in the banking sector. US bank bond portfolios remained deeply underwater in the fourth quarter of 2022, reducing banks' access to liquidity in the fist quarter of 2023. Amid funding concerns, bank borrowing from the Federal Reserve's newly created Bank Term Funding Program jumped to $53.67 billion through March 22, up from $11.94 billion the week prior. The recent failures of Silicon Valley Bank and Signature Bank, both of which had large amounts of uninsured deposits, have prompted debate about the future of deposit insurance limits. In Europe, large banks entered the industry turmoil with liquidity levels that were well above regulatory minimums and that improved, on average, in the most recent quarter.
S&P Global's provisional Purchasing Managers' Index survey data for March points to resilience of economic growth across the four major developed world economies. Business activity rose across the G-4 economies for a second successive month, with growth accelerating at the fastest rate since May 2022. Growth hit 10-month highs in the US and the eurozone, while a nine-month high was recorded in Japan.
Energy storage and electric vehicles suppliers are turning to batteries rich in iron amid concerns over looming shortages, prices and sustainability of other essential energy transition feedstocks. Lithium-iron-phosphate batteries will rise to nearly 50% of global demand for EV batteries by 2027, according to a new report from S&P Global Commodity Insights.
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Written and compiled by Roma Arora.
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