As negotiations in Washington will continue, there was a bit of uncertainty over the timing of a fresh stimulus program especially with some U.S senators (Mitch McConnel in particular), casting doubt on reaching a fresh rescue bill before some current benefits do expire. This however did not deter the performance of the futures on the S&P 500 as it ticked up after U.S equities finished well off Tuesday’s highs. The gauge on the S&P 500 Index rose slightly by 0.17% on Tuesday opening at 3,268.52, with its day range between 3,247.77-3,277.29 before closing at 3,257.30. Yields on the 10-year Treasuries remained at 0.60%.
In Europe, stocks did consolidate in early trading after having three days of gains even though the Stoxx 600 remains on track for its longest streak of weekly gains this year. It fell 0.5% with the French and Spanish stocks leading the decline by region; Swedish and German stocks did outperform.
Markets in Asia were pretty mixed especially with the sharp rise of cases in the Melbourne area, Australia’s benchmark (S&P/ASX 200 XJO) was down more than 1% while the likes of Tokyo’s Nikkei 225 index NIK and Shanghai Composite Index, lost roughly 0.2% and gained 1.4% respectively.
Oil prices climbed to its highest level since early March on Tuesday as indications of an economic recovery (EU’s stimulus package) from the coronavirus pandemic helped drive a rally. Futures on both Brent and WTI jumped more than 2% on Tuesday. EU leaders agreed on an unprecedented stimulus package to get their respective nations out of the recession at the same time also eyeing up a potential approval of the first covid-19 vaccine in 2020 further adding to positive sentiments. On the supply side, most analyst are expecting US inventories to tighten as a Bloomberg survey showed a fall for the third time in four weeks as at the last time figures were released.
In the Eurobonds SSA space, it was considered as a risk-on session brought about by the gains in crude oil prices, with largely most papers from NIGERIA, GHANA to ANGOLA literally flying. The long end of the Nigerian papers saw the most gains as we witnessed over a 2% movement in prices with the entire curve experiencing an average of 1.5% increase in prices. The ANGOLA papers at the short end of the curve, also saw a jump with limited offers seen around in the market as investors continue to wait on IMF’s decision on a bail out for Angola.