The NASDAQ Composite hit record highs in its 8th straight gain, the S&P 500 closed well off its earlier 1.2% gain on the back of reports that there has been an increase in cases in most hotspots in the U.S (South and Southwest of the U.S). Most investors are betting that the trillion of dollars all splurged out by Central Banks and Governments around the world may shield and support economies from a second wave resurgence. U.S. stock market futures were little changed late Tuesday while the Nasdaq Composite Index rose 74.89 points, or 0.7%, to end at a new record of 10,131.37.
U.K’s Prime Minister, Boris Johnson is set to launch a big gamble of lifting its lockdown in July in a bid to save the nation’s economy. Earlier on Tuesday, figures from the government showed that the two main work-support programs had so far cost more than 30 billion pounds ($38 billion). Ministers worry about how many of the 9.2 million jobs being supported will disappear once the programs end.
In Europe, equities pulled back at the open as investors take stock of U.S. virus surges and the aftermath of U.K. reopening news. The Stoxx 600 index -0.5%; most regional indexes lower by 0.5%-0.6%. The euro climbed 0.4% to $1.1304, the strongest we have witnessed in more than a week. Germany’s 10-year yield climbed three basis points to -0.41%. The euro-area composite PMI rose to 47.5 in June from 31.9 in May, as both services and manufacturing readings increased to 47.3 and 46.9, respectively. The French PMI jumped back above 50, but German readings remained in contractionary territory in May. While we expect activity in both countries expanded in the last two months, the stronger reading in France is consistent with activity having dropped by more during the lockdown and having more ground to recover than in Germany.
Oil slipped from a three-month high before a U.S. government report expected to show another increase in inventories, signaling the market still has its work cut out to clear a massive supply glut. West Texas Intermediate for August fell 36 cents to $40.37 a barrel in New York Mercantile Exchange while Brent for August settlement slid 45 cents to $42.63 on the ICE Futures Europe exchange
In the SSA, Eurobond sphere, the ANGOLA papers were the biggest gainers as prices on 2025s maturities opened gained c.7% on the day as China agreed to a 3-year debt moratorium for Angola. The Nigerian Sovereigns tickers did also strengthen of course gleaning of the positivity from Angola. Yields on the Nigerian Sovereigns compressed by an average of c.5bps on the day.
In Zambia, measures are being taken to ensure a fluid process of its debt management with a committee being formed to access its Eurobond holdings. The committee consists of 10 funds based in U.S and Europe that hold an approximately 35% of Zambia’s $3 billion in Eurobonds. The group in an emailed statement have said, they are also engaging holders of a further 30% of Zambia’s outstanding Eurobonds and have named Newstate Partners as their financial advisers.
In Nigeria, during a call with Investors on Tuesday, the Hon. Minister of Finance, Zainab Ahmed and Director General of the Debt Management Office, Patience Oniha have said Nigeria will not request a delay in its debt-service payments and have also shelved any plans to issue Eurobonds this year due to deteriorated market conditions.