US stocks closed higher on Monday as the Fed announced an expansion of the scope of its $750 billion corporate debt loan facility. The NASDAQ led gains, up 1.43% while the S&P and the DOW closed 0.83% and 0.61% respectively. Yield on 10Y USTs closed higher at 0.7215%.
Prime Minister Boris Johnson set end-July as the deadline for sealing a UK-EU trade deal bringing some calm as the prospects of a no-deal were rising in recent weeks. One of the main areas of contention has been the EU’s insistence that the UK stick closely to the bloc’s laws on most issues including corporate subsidies, environmental laws to ensure a “level playing field.” The pound and euro closed higher at $1.2605 and $1.1323 respectively.
The NIKKEI surged 4.88% on Tuesday as the Bank of Japan announced an expansion of its lending programme for commercial banks by about 50% to an equivalent $1.02 trillion. The latest moves by the Fed to support markets also spurred markets with the ASX up 3.89% while the HANG SENG and the CSI rose 2.53% and 1.31% respectively.
The real extended losses on Monday following a decision by the Treasury Secretary to step down. The close of 5.1564 to the dollar means about a third of the rally the currency saw since May has already been trimmed. The outgoing secretary, Mansueto Almeida was lauded in markets for being market friendly and his replacement Bruno Funchal, a former provincial finance secretary, is expected to continue with the austerity push that has been the mark of the Brazilian government. BRAZIL 30s were higher, trading in the high 96s.
Zambia officially asked the Paris Club for a suspension of debt repayments until December over the weekend. This comes as the country has roped in an advisor to assist in debt restructuring which has seen its Eurobonds pull up a bit with 22s now trading about upper 40s having traded in the 30s early May. The kwacha closed firmer against the dollar at 18.025.