UNITED STATES

A stronger shift in the markets late in the day has come as a nice surprise yesterday, pushing equities, bonds and oil up in the matter of minutes after a generally weaker tone during the European session, especially after the US Initial Jobless claims data for the week came as a small miss to expectations (1.48mn vs expected 1.32mn), continued claims decelerated to 19.5mn from 20.5mn last week and vs. 20mn consensus however. The US virus statistics continued to be rather gloomy, with nationwide cases rising +1.7% (setting a new record for daily cases). In light of that, Texas and Florida decided to halt the process of reopening their economies. This, however, seemed to reinforce the hopes of investors in further US fiscal stimulus, in turn helping the markets gain a firmer footing. S&P 500 ended the day at+0.71% and NASDAQ at +0.94%. USTs has paused in their rally, with 10Y yield retracing back 2.6bps from the lows of yesterday to end the day at 0.68% lvls.

EUROPEAN UNION

In Europe, 10Y German Bunds tightened 3bp in yield to -0.47%, despite better than expected Consumer confidence data (at -9.6 vs surv -12). A remarkable price movement was seen in 100Y Austrian bonds both new and old, as a result of the rates rally in the last 2 days. The recently issued RAGB 2120 has risen a whopping 10pts from reoffer, currently seen trading at mid-108 levels, which is however only half of the performance of RAGB 2117, that has traded up 18pts in the last 2 days and is currently seen at mid-197 lvls. Well, wow, the price volatility of long duration continues to impress! Elsewhere in Europe, periphery EGBs have also ended the day marginally stronger, however underperformed the DBRs on a weaker market sentiment. SPGB yields dropped 1-2bps, BTPS stayed flat, while GGB yields actually widened around 4bps.

MENA

In MENA, the market tone was followed yesterday with both IG and HY opening weaker but recovering later in the day along with oil. In IG space KSA and ADGB seemed to be in preference closing roughly unchanged on the day, followed by QATAR. DP World has successfully tapped the markets with a Perp NC5.5Y Hybrid Sukuk bond, issuing $1.5 at 6.125% yield. The bond however remained weaker in secondary ending the day trading at 99 (99.424 reoffer). HY continued to be under pressure yesterday, with OMAN and EGYPT curves seen more than 10bps wider in yield at some point, just to recover almost fully on the day and well off the lows. In particular a good demand was seen in OMAN, that, despite the downgrade by Moody’s to Ba3 from Ba2 a few days back has not sold off by all that much this week, loosing only 3-4pts on the long end.

LATAM

In LATAM, higher beta space was weaker with flows in ARGENT remaining better offered, down 50c-1.25pts on average across the curve. ECUA however seemed to be getting some demand, ending the day -25c-75c on average. In low-beta space the tone was firmer. URUGUA outperformed with long end up as much as 1.5pts after successfully issuing a tap of URUGUA 31s and a 2040 UYU bond a day before. CHILE and MEX ending the day marginally flat on the day, while PEMEX underperformed the sovereign, ending the day down 1-2pts. In other primary, Chilean VTR telco services has successfully managed a $1.15bn new issuance across two 2028 tranches (a secured and unsecured bond), with the unsecured VTRFIN 28 outperforming the secured VTRCOM 28, trading at 102.5 lvls vs low 101s respectively. In Mexico, Kimberly Clark Mexico also came to the market issuing a $500mio 2031 bond, which was also well received by investors and ended the day bid 80c above reoffer.

RUSSIA

Brent gained 5% off the lows of the day yesterday, pushing it above $41/b again, as Russia said they will slash the exports of Urals crude by 40% MoM to about 785k barrels a day in July, the lowest in at least a decade according to Bloomberg. The move has helped a recovery in Russian sovereign bonds with RUSSIA 47 moving up about 80c after the initial plunge of 1.5pts earlier in the day. The newly issued GAZPRU 27 was weaker on the day, after barely trading on Thursday in the absence of Russian investors who were on holiday at 99.95 levels, but trading at withing a 99.5- 99.75 range yesterday (100 reoffer). UKRAIN underperformed, with UKRAIN 30 loosing another 1pt yesterday to 86 lvls.

SSA

In SSA, the flows were mixed and a rather rollercoaster in the last couple of days. A strong performance of ANGOL on Wednesday, that saw ANGOL 25s being bid at 91 levels (up around 3pts on the day) was just as quickly reversed on Thursday with offers seen as low as mid 88 levels mid-day, which again turned just as quickly with the oil move and moving back to 89-90 levels as we ended the day. NGERIA was slightly calmer with NGERIA 49s dropping to 101 offers from mid 102s levels the day before on Wednesday to move back to mid-101 levels today. ZAMBIN stayed relatively flat and marginally weaker at 53 levels. GHANA long end was better offered yesterday, while the short end and belly of the curve continues to be well in demand.