US Stimulus at a Stalemate
Investors have begun considering the possibility that a deadlock in Washington could drastically hinder the U.S virus package stimulus package, weighing on the emerging recovery and they are left to wait and watch for signs on progress on stimulus. We witnessed the S&P 500 contracts fluctuate after the benchmark fell for the first time in eight trading sessions, after opening 3,370.34 and closing 3,333.69 showing a 0.80% drop.
Despite European equity futures struggling for traction yesterday and underperforming after a dismal economic data in the U.K. cast doubt on the timing of the region’s recovery, there was a still a bit of good news for the European markets with Germany’s ZEW economic expectation survey rising to 71.5 in August, up from 59.3 in July and well above forecasts for 54.5.
As U.S inventories fell 4.01million barrels last weeks, we saw oil climb to a near five-month high after reports pointed to a third straight weekly drop in American crude stockpiles. The stockpiles data overshadows anxiety over the still-surging coronavirus, as infections breached 20 million globally. Oil is struggling to climb above its 200-day moving average as ongoing uncertainty over the trajectory of the demand recovery from the pandemic keeps gains in check and OPEC+ returns some barrels to the market. West Texas Intermediate crude gained 0.9% to $41.99 a barrel while Brent crude gained 1% to $44.93 a barrel.
In the Eurobonds SSA space, the NIGERIA Sovs simply continued its bullish run with some help from the continued increase in oil prices. Demand did improve across the sovereign curve, with more focus on the mid-tenured papers. ANGOLA Sovs also strengthened (+25c – +30c), while the likes of EGYPT also gained massively by +50c.