Ghana budget finally passes with a scale-back of the e-levy
US stocks fell back in the red on Tuesday, erasing Monday’s rebound as contrasting news on the efficacy of current vaccines against the omicron COVID variant filtered through. Adding to the bearishness were remarks by Fed Chair Jerome Powell that tapering may proceed at an even quicker pace. The S&P led losses, down 1.90%, while the DOW and the NASDAQ shed1.86% and 1.55% respectively. Yield on 10Y USTs closed lower at 1.4443%.
German inflation shot to 6% in November, topping the 5.5% median estimate in a Bloomberg survey. The overshoot followed similarly high figures for Spain (5.6%) and Belgium (5.6%) fuelling concerns that the ECB could have it wrong on the assertion that the spike will ease soon. Euro area inflation also hit 4.9%, overshooting the 4.5% Bloomberg survey median estimate. The euro closed firmer at $1.1291 while yield on 10Y DBRs was lower at -0.349%.
Asian stocks were mostly firmer on Wednesday shaking off Tuesday’s selling as markets continue the back-and-forth reaction to the latest variant. The HANG SENG led gains, up 0.78% towards the close while the CSI rose 0.24%. The NIKKEI managed to hold onto gains, closing 0.41% firmer even as the omicron variant was detected on its shores. The ASX closed 0.28% weaker however, following a 1.9% QoQ GDP contraction in Q3.
The lira continued its slide on Tuesday as President Erdogan continued to make a case for even lower rates; The currency touched a high of 13.8517 to the dollar late Tuesday following Erdogan’s remarks before somewhat recouping the losses at the open on Tuesday. The benchmark Borsa Istanbul 100 continued to hold up however, closing about flat on Tuesday to cap a return of 18.8% for the month.
Ghana’s budget was finally passed in Parliament on Tuesday as majority members returned to pass it having walked out during last week’s failed vote. The passing came with a caveat though, with the government now in talks with telecoms companies to scale back the 1.75% e-levy on mobile transactions. The move thus complicates the government’s revenue collection having projected a 43% surge in 2022 to fund a 23% increase in spending.