US stock futures went northwards as market participants continued to gauge the economic outlook at a time of dampening oil prices, Federal Reserve monetary tightening policy and ongoing war in Ukraine. Although US stock prices closed negative yesterday with S & P 500 down 1.57% to 4,530.41, DOW at 34,678.35, down 1.56% and NASDAQ 100 down by 1.54% to 14,220.00, Futures are currently positive with the S&P Futures up at 0.43% (4,450.75), DOW Futures 0.39% (34,760.00) while NASDAQ Futures at 14,949.00, up 0.54%. Energy prices fell as oil dropped on the move by the U.S. government to release one million barrels of crude per day for 6 months from reserves to address rising costs. Hence, brent crude fell 1.7% to $102.91 a barrel. US Government bond yields increased and the curve between 2-year and 10-year Treasuries yields remained close to inverting, a concern of an economic recession if the Fed uses assertive interest-rate hikes to dampen the effect of high inflation. Consequently, the yield on 10-year USTs rose 7bps to 2.41% while Gold fell 0.4% to $1,930.57 an ounce. Investors are still desiring to know if the war in Ukraine, the isolation of Russia from the west and the Fed’s hawkish turn will give rise to more volatility and losses for stocks and bonds. U.S. jobs report is expected later today.
From today, foreign buyers of Russian gas will have to pay in roubles and Gazprombank, one of the Russia’s largest banks, may become the main beneficiary of the new payment rules. GAZPRU 8 ⅝ 04/28/2034 was up at 44 on the news, while GAZPRU 7.288 08/16/2037 was flat at 45. Russian rouble continued to strengthen with USDRUB now around 83. MICEX closed 7.5% higher at 2700. ROSN and GAZP were leading the move. A coupon of $329.2 million was paid on RUSSIA 7 1/2 03/31/30. So far Russia has managed to fulfil its obligations, but sovereign bonds were mixed with Russia 28 down at 40 and Russia 47 up at 24. Meanwhile, VEBRU and the Reserve Bank of India made a first transaction on new Indo-Russian platform which can became alternative to SWIFT.
Bunds opened weaker retracing the trend from yesterday. The 10Y touched a high of 0.618% before dropping to close at 0.613%, 1bp down day-on-day. Peripherals mirrored the move on bunds with a relatively weak open; 10Y BTPs yields went as high as 2.05% before retracing to close 2.04%, just a basis point firmer. Stocks opened higher; the Stoxx 600, opened higher at 457.29 compared to previous sessions closing of 455.86. On the data front, Eurozone CPI data is expected later today.
GHANA’s (+1.25) firm run eased at the close of Thursday business as some sellers surfaced amid profit-taking. ANGOL (+1.00) and NGERIA (+.50) also eased off the day’s highs with former also being weighed down by issuance headlines; ANGOL 25s remained quite bid however as these will be subject to a $750 million tender offer pending new issuance. A rather muted to weak start to kick off the new month across the space.