US equities bounced back, sell offs were toned down as markets absorbed the elevated concerns due to feds plan to tighten aggressively. The S & P 500 was at 4,500.00, up 0.43%, Nasdaq 100 increased by 0.26% to 13,897.30 while Dow gained 0.25% to close at 34,583.57. The yield on 10-year UST was slightly changed at 2.65% amid central Banks laid out strategy to curb inflationary pressures. Brent crude rose 0.4% to $100.97 per barrel as uncertainty over commodity disruptions due to the war in Ukraine persists while Gold remained stable at $1,933.80 an ounce. Meanwhile, Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic said they are in support of raising rates to neutral (circa 2.4%) while keeping an eye on the economy’s performance.
Russian rouble was up 5% to the US Dollar with USDRUB closing at 75.75, as Alfa Bank and Sberbank are preparing to sell foreign currency holding after being sanctioned by the West. Another supporting factor for rouble is Russia’s strict capital controls, which force exporters to sell 80% of their foreign earnings. IMOEX index added 0.9% and closed at 2635.39. After two days of sell off, Russian government bonds prices have stabilized with Russia 28 trading around 23.5 and Russia 47 slightly above 18. The EU countries have agreed on the fifth round of sanctions, which are due to be announced today. New EU sanctions will include restrictions on coal import from Russia, a ban on access to EU ports for Russian ships and asset freezes for several banks. German Chancellor, Olaf Scholz, has earlier announced that Germany would stop importing coal from Russia for a period of 120 days. At the same time, Russia’s closest neighbour, Kazakhstan, has no plans to join sanctions against Russia. As Kazakh Foreign Minister, Mukhtar Tleuberdi said, his country will not take any steps that would infringe upon Russia’s interests and would conflict with the spirit of partnership.
Bunds opened slightly stronger following the trend from yesterday. The 10Y touched a high of 0.693% before closing at 0.681%,1bp down day-on-day. Peripherals mirrored the move on bunds with a relatively strong open; 10Y BTPs yields went as high as 2.27% before retreating to close at 2.24%, 3 basis points firmer. Stocks opened higher after recent declines as investors made use of appealing valuations while considering the risks from hawkish central banks and Ukraine war; the Stoxx 600, opened higher at 461.34 compared to previous sessions closing of 455.02.
Angola’s latest issue was well received by the market with books of over $4 billion for the $1.75 billion issue; the new note is currently bid 30c above re-offer (100). The space continues in firm fashion as risk sentiment improves to end the week. ZAMBIN (+.50) leads demand while long GHANA (+.375) sees more of the demand on the curve.