U.S. Treasuries yield dropped; equities futures declined as traders continue to seek for save haven assets over Russia/ Ukraine crises. WTI Crude oil prices declined by 1.30% to $92.47 per barrel as S&P 500 futures and Nasdaq 100 fell by 0.3% and 0.1% respectively. The 10-year US Bond yield fell below 2% and gold prices went up by 0.30% to $1, 875.43 an ounce. Traders’ concerns over the resolution of the crisis deepened due to mixed signals from Kremlin regarding withdrawal of troops from the Ukrainian border. The anxiety over Ukraine gained more prominence over the latest Fed minutes. The US FED stated that they would start increasing interest rates soon while monitoring inflation figures to guide how fast they would tighten. Starts are expected to be down 0.4% month on month for housing & building permits to 7.2% month on month. Also, Jobless claims is expected to show 218,000 as economists anticipate a February reading of 20.00 down from previous level of 23.20.
Rates reversed their selling on Wednesday with 10Y DBRs closing 3bps firmer at 0.276%. The trend continues at the open – yields touching 0.266% at 8.10GMT. BTP yields continued their firming trajectory with 10Y yields closing 4.6bps lower on Wednesday; they trade a basis point firmer at the open. Elsewhere, German car sales grew 8.5% YoY in January bouncing back from a 26.9% contraction in December; month-on-month figures were 19.1% lower, however. In focus today will be ECB’s Lane – the chief economist – as well as supply from France and Spain.
The Ghana Stock Exchange (GSE) is in the process of establishing an investor credit rating agency for listed entities that should launch by July this year. It has been said that the rating agency would serve the purpose of enhancing the credibility of the GSE as well as listed players on the bourse and boost confidence in both. GSE managing director Ekow Afedzi has said that establishing a credit rating agency as a feature of the stock market will help with its transformation agenda. This comes amidst accusations by Ghana that some major international credit agencies unfairly downgraded the country’s credit worthiness, impacting access and costs to the foreign capital markets. Just last week, Moody’s downgraded the GCB Bank’s global long-term deposit ratings from B3 to Caa1, basically attributing it to Ghana’s sovereign creditworthiness. Yields in the sovereign papers of GHANA have held firm (AVR. +45bps across the GHANA sovereign curve) in the past two days buoyed by the recent rally seen in oil prices and the relative calm seen in interest rates after its recent rise due to inflation figures and the FED’s expected hike in rates.
LATAM markets found some footing yesterday with the space trading higher. In local news Brazil’s government is considering a tax exemption for the foreign investors into domestic corporate bonds in an effort to attract more FDI into the country. BRAZIL was the best performer with the long end sovereigns roughly 70c higher on average followed by CHILE and PERU, both up around 60c in the long end; MEX and COLOM were up around 50c. PEMEX AND PETBRA were also higher with long end bonds up 50-60c on average for both as well despite the sharp drop in oil prices with Brent reaching as low as mid-$91s levels in the evening. In corporate news, Mexican CREAL has issued a statement with information on the status cross-default events, where they also noted that the that they are seeking “an orderly restructuring process” and have already met with a group of banking lenders. The bonds were well in demand for the last few days with bids seen at 20-23 levels across the curve and sellers scarce.
Trading on Wednesday started sideways in Russian assets. RUSSIA 47 traded at 108 level, up from 107.5 the day before. The worst fears about Russia’s invasion of Ukraine were not confirmed and USDRUB was flat at 75.20-75.40. RUSSIA 5Y CDS spread showed reduction of Russian credit risks last 2 days and tightened 30bps from 250 to 220. The MICEX traded 1.3% higher. Meanwhile Russian Finance Minister Anton Siluanov said that Russia is ready to consider proposals from Belarus about refinancing its $1b debt in 2022. Aid may be provided via Russia-led Eurasian Fund for Stabilization and Development or as government loans from Russia. Based on this news BELRUS 31 rose to 76.75 from 76 at the morning. Ukraine said on Wednesday that the websites of Ukraine’s government agencies and banks were hit by a DDoS attack. At the same time United States Secretary of State Antony Blinken commented that there is no evidence that the Russian Federation has withdrawn troops from the Ukrainian border. This morning some Russian media reported provocations on the line between Ukraine and DNR, LNR republics. MICEX dropped by 2.5% on the news.