US stocks showed 4th consecutive day of growth yesterday despite mass protests and rising tensions between Beijing and Washington– S&P added 1.4% while Nasdaq appreciated by 0.8%. The yield on 10Y USTs gained 6.1 bps to .747% level. On another note, ISM Non-Manufacturing PMI figures came above expectations – 45.4 vs 44.0. On the macro side today, Initial Jobless Claims figures coming at 14:30 GMT +2.
Oil benchmarks started higher yesterday but gave up the gains, Brent closed 0.7% lower while WTI dropped by 0.1%. This morning oil continued to fall as OPEC+ unity was threatened by a long-running feud over complying with production cutbacks, while U.S. data cast doubt on the strength of the demand recovery, Bloomberg reported. WTI falling 2% this morning.
Stocks in Asia rising this morning after South Korea announced an additional $29bn stimulus programme to help support the economy. Chinese Caixin purchasing managers’ index showed that services sector activity rose for the first time in four months in May – 55.0 vs 44.4 in April.
German Chancellor Angela Merkel received support for her EUR 130bn stimulus plan which will include lower value-added tax (VAT) to boost consumption while the ECB is expected to boost its emergency purchase program by EUR 500bn. Today investors will be waiting for ECB rate decision (coming 13:45 GMT+2).
Ministry of Finance collected RUB 108.5 bn during weekly OFZ auctions yesterday with 1.47 bid-to-cover ratio as the demand for risk continues in Russia. The yield on sovereign Eurobonds fell yesterday by 5-10 bps. Ruble strengthened to 68.65 vs USD (+0.7%).
ANGOL eurobonds continued its trend on Wednesday (gained 2-3 points across the curve) supported by the news on Angola-China talks over the debt relief and the comment of finance minister who said that Angola will join the Group of 20 (G20) Debt Service Suspension Initiative (DSSI), which allows the country to direct funds to combat the impact of COVID-19.