US stocks cap a weak September with losses

US stocks closed lower to cap a weak September performance. The DOW led the slide, down 1.59% while the S&P and the NASDAQ shed 1.19% and 0.44% respectively. 10Y USTs yields were 3bps down as Congress agreed on a short-term spending bill averting a partial shutdown.

The UK economy grew 5.5% in Q2, a stronger showing than the earlier 4.8% estimate. The news came as the BoE cut its Q3 growth forecast to 2.1% citing labour shortages and supply chain problems. Hopes that the economy would be back to pre-pandemic levels by year end have thus faded with economists now expecting the recovery to complete by Q2 2022. The pound closed slightly firmer at $1.3474 while yield on 10Y UKTs rose to 1.022%.

Asia stocks tumbled, taking cue from Wall Street’s performance on Thursday. The NIKKEI found little comfort in the improvement in Japanese manufacturers’ sentiment to its highest since 2018, closing 2.31% lower. The ASX was similarly weaker, tumbling 2.00%. Chinese and Hong Kong markets were closed for holidays.

The BCB upped its 2022 GDP forecast to 2.1% in its latest quarterly inflation report, pipping the BCB economists survey forecast of 1.57%. 2021 growth was similarly raised to 4.7% while inflation estimates were held – 8.5% for 2021 and 3.7% for 2022. The real closed weaker at 5.4429 to the dollar while yield on BRAZIL 30s was higher, about 4.28%.

Russian market indexes were in the green during the trading session on Thursday. The ruble-denominated MOEX Russia Index grew by 1.11% while the dollar-denominated RTS Index rose by 1.21%. The dollar lost 0.1% to 72.74 rubles. The euro edged down by 0.31% and amounted to 84.18 rubles.

Oil prices dropped on Friday on the prospect that OPEC+ might step up a planned increase in output to ease supply concerns, with soaring gas prices spurring power producers to switch from gas to oil. Brent crude fell as low as $78.00 a barrel earlier in the session from yesterday’s $78.52 close while WTI went as low as $74.70 from yesterday’s $75.03 close.