US equities showed the biggest decline since June as the increasing number of coronavirus cases spooked investors – S&P dropped by 3.5%, Nasdaq fell 3.7%. The yield on 10Y USTs added 0.4 bps and closed at 0.773% lvl. Lack of new stimulus deal agreement also hit the market as the uncertainty is on its highest levels.
Oil prices dropped on Wednesday on renewed coronavirus lockdowns and over-supply worries – Brent lost 5%, WTI closed 5.5% lower. The recovery in fuel consumption since April appears to have stalled and may be reversing, with US fuel inventories rising.
European equity markets fell 3-4% on the lockdown fears as Germany imposed a partial lockdown for November while France introduced an even harder lockdown, requiring people to stay at home starting from Friday. The main event for today is ECB meeting: most analysts believe that the regulator will keep rates and policy unchanged. Also, there is a hope that we will see a signal for a potential asset purchases expansion.
Russian Eurobonds traded 20-50 bps lower in price, RUB ccy lost 2.4% and closed at 79.16 vs USD. Ministry of Finance sold RUB 436.6 bn yesterday during its weekly auctions – that’s a new record: it sold RUB 430 bn of RFLB 29 FRN and just RUB 6.6 bn of new RFLB Mar-31.
SSA opening slightly higher this morning with the usual names – NGERIA, KENINT, GHANA – seeing more of the initial lift. ANGOL also doing likewise having been slower out of the blocks during Tuesday’s rally. Interestingly, the space held steady yesterday despite headwinds in tanking oil prices (down 5%) and COVID-19 lockdowns in Germany and France which were officially announced later in the day.