US stocks rallied to close out a tumultuous month for investors with indices ending down for the month. The NASDAQ rose 3.41% to move out of correction territory while the S&P and the DOW gained 1.89% and 1.17% respectively. Yield on 10Y USTs closed about flat at 1.7767%.

Portuguese Prime Minister Antonio Costa won an absolute majority in Sunday’s general election removing the need for coalitions in order to pass budgets; the 2022 budget had failed to pass in October as previous coalition partners had voted against its passing. Italy also ended a fraught voting week for the next president with Sergio Mattarella being retained despite his earlier intent to resign. The early spread tightening in both was however wiped out at the close as bunds sold after a high CPI print with 10Y PGBs and BTPS closing little changed.

Australian and Japanese stocks moved higher on Tuesday in a muted trading session with most markets closed for the Lunar New Year holiday. The ASX rose 0.49% as the RBA pledged to hold out on interest rate hikes even as it revised its economic forecasts higher; unemployment is expected to go sub-4% by end-2022 while inflation is expected to peak at 3.25%, just outside the 2-% target band. The NIKKEI rose 0.28% with December unemployment coming in slightly better at 2.7%.

Mexico’s economy contracted 0.1% in Q4 becoming the second major LatAm economy to fall into recession following Brazil; the 0.1% contraction was slightly better than the 0.3% median estimate in a Bloomberg survey. Increased central bank hawkishness in a bid to rein inflation appears to have also derailed recovery from the COVID slump as seems to be the case in Brazil as well. MEX 32s were little moved, closing about 3.62%.

Ghana’s 2021 budget deficit fell to 11.7% in 2021 slightly better than the 12.1% forecast by the Finance Ministry during the 2022 budget presentation; the figure includes legacy debt, a metric the ministry started employing in November. The deficit excluding legacy debt shrank to 9.7% from 2020’s 11.7%. The central bank also held the benchmark rate as saying the impact of November’s 100bps hike had not yet filtered through the economy even as December’s 12.6% CPI print is higher than the 10% upper band of the target range. Yield on GHANA 32s closed 6.5bps tighter at 12.108%.