US stocks traded in the green on Wednesday mainly due to signs of lower inflation. S&P gained 0.7%, as did Nasdaq, Dow Jones followed suit, up 0.6%. The yield on 10Y UST increased by almost 1 bps to 2.6123%. Trump’s trade chief has mentioned that China trade talks could fail, as the US is adamant on being able to raise tariffs if there are violations of the agreement.  The expert consensus on the trade talks are positive, as are the market expectations.


Asian stocks are trading mixed this morning, CSI300 and TOPIX are down 0.7% and 0.2% respectively, Hang Seng is trading in the green, higher by 0.15%.

Oil closed at a 4-month high with Brent crude up 1.3% at USD 67.55, and WTI 2.4% in the green at USD 58.26. The main incentive for the spike in price was a surprise drawdown in crude inventories in the US, narrowing by 3.9m barrels.


The British Parliament rejected the possibility of leaving the EU without a deal, which now paves the way for a vote on a potential Brexit delay today. Theresa May is still dedicated to fighting for her deal, which will get a third vote most likely next week. The Prime Minister stated that if there was a final deal by March 20, she would only ask the EU for a ‘short’ extension, if a deal is not reached then the requested delay would be much longer. The Pound rallied significantly after no-deal Brexit was voted out, starting the day at 1.3075 to USD 1.3338 rate by the end of it.


Worries regarding the German economy continue to grow as an institute based in Munich expects 0.6% growth, which is less than half of the 2018 value. While the European officials went on record to say there is little more they could do for the UK in terms of concessions, the consensus is that erasing the possibility of no-deal Brexit could improve the EU-UK relations. The Euro rallied following the vote, finishing Wednesday trading at USD 1.1327. The yield on 10Y DBR gained over 2bps to 0.0788%.


Following a lack of major news, the Russian Ruble gained 0.2% yesterday to 65.44 per USD. The Russian ministry of finance held a successful auction yesterday, auctioning two bullet bonds, maturing in July 2022 and 2029. The RFLB 22 saw a total bid of RUB 61.5bn, MinFin allocated RUB 34.7bn with cut-off yield at 8.02% RFLB 29 had a total demand of RUB 83.5bn, and MinFin sold RUB 56.7bn, the cut-off yield was 8.48%. Russian corporates traded in the red mostly.