News of the much talked about vaccine brought quite a bit of optimism to the financial markets which have been struggling lately to make headway in the face of new outbreaks across the U.S and Asia. Stocks and equity futures in the U.S advanced on the back of this news. Futures on the S&P 500 Index increased 1.3% to 3,197.52, the Dow Jones Industrial Average was up 2.13% to 26,642.59 while the NASDAQ composite closed 0.94% to 10,488.58 higher with the Federal Reserve Gov. Lael Brainard called for sustained large-scale asset purchases by the U.S. central bank to help the economy rebound amid a “thick fog of uncertainty” brought on by COVID-19.
In Europe, the ECB is to meet on Thursday to set monetary policy with President Christine Lagarde due to hold a virtual conference afterwards. The Stoxx Europe 600 Index sank 1%, while Germany’s 10-year yield sank one basis point to -0.46%.
Markets in Asia seem to have followed their U.S counterparts early Wednesday, following the rally in the U.S markets obviously driven by renewed optimism over the progress of a convid-19 vaccine which could boast risk sentiments. Japan’s Nikkei NIK lead the way, up about 1.5% as investors will be looking to the bank of Japan’s policy decision which would give more clues about the economic outlook. Stocks in China turned to have a mixed trading session with the Shanghai Composite SHCOMP down 0.5% (3,361.30 after opening at 3,414.62). China is set to release its second-quarter GDP on Thursday as well as key economic indicators for June.
Oil prices have edged higher on the back of a drop in U.S crude stockpiles and with few signs that an additional supply from OPEC+ next month will not be as much as previously projected. OPEC+ is seeking compensatory production cuts in August and September from members that have missed targets in previous months, according to delegates. The proposal, which may temper the impact of the planned supply resumption, will be discussed Wednesday by the group’s ministerial monitoring committee. The West Texas Intermediate crude gained 1% to $40.83 a barrel while Brent crude increased 0.7% to $43.42 a barrel.
In the Eurobonds SSA region, it was considered as a risk-off session, with continued sell-offs witnessed on the belly and long end of the Nigerian Sovereign curve. Despite the risk-off sentiment seen, we did continue to see a sizeable amount of demand across the short end and belly of the Ghana Sovereign curve with the 23s being the most sought after.