US equities & bonds stable as traders bet on rate hikes

US Stocks closed higher showing some resilience and Treasuries were lower despite the inflation data for march. The S & P 500 was up 1.12% to 4,446.59, DOW was at 34,564.59, up 1.01% and NASDAQ 100 gained 2.03% to close at 13,643.59. The yield on 10-year USTs declined 4 bps to 2.66% as traders revised aggressive bets on Fed’s interest-rate increases. The rise in commodity prices, supply disruptions caused by the war in Ukraine continues to affect the global economy and influence market sentiment. Consequently, Brent crude fell 1% to $107.65 per barrel. Appetite for haven assets dwindled as gold price dropped to $1,974.08 an ounce ,0.2% down. Investors are still concerned that high inflation and supply chain disruptions will affect income spreads.

A Ministry of Finance press release stated that Eurobond coupon payments for Russians would be made via a Russian payment agent to NSD. Russian citizens were previously not getting coupons remitted via Euroclear/Clearstream as was the case with foreigners; foreigners will continue to receive via Euroclear/Clearstream. RUSSIA 28 traded at 25 level, while RUSSIA 47 is around 19. IMOEX decreased at 0.5% from 2540,99 to 2528,42 points. Ruble is flat with USDRUB at 79.85 level. Sources said the world’s top oil traders are planning to cut purchases of oil and fuel from Russia’s state-controlled oil companies such as Rosneft and Gazprom Neft as early as May 15 to avoid violating European Union sanctions on Russia. Vladimir Yevtushenkov, the biggest shareholder in AFK Sistema, has reduced his stake in the corporation to 49.2% amid UK sanctions. Earlier Russian top businessmen including President of the Russian oil producer Lukoil Vagit Alekperov, Board Chairman of Sistema Holding Vladimir Evtushenkov were added to the updated sanction list posted on the website of the UK government. Sistema’s asset portfolio includes MTS, timber industry holding Segezha Group, Ozon and others. MOBTEL 5 05/30/2023 REGS Corp is flat at 30 level. LUKOIL 2023 decreased from 56 to 54 while LUKOIL 2030 REGS dropped from 41 to 38.

Bunds open marginally weaker following the trend from yesterday. The 10Y touched a high of 0.797% before dropping to 0.789%, down 1bp. Peripherals mirrored the move on bunds with a relatively weak open; 10Y BTPs yields went as high as 2.33% before retreating to 2.32%, 1 basis point firmer. Stock was little changed; the Stoxx 600, opened at 457.06 about where it closed yesterday.

SSA opens mostly firmer ahead of the Easter break with risk sentiment turning as rates move lower; the firming later in the session yesterday was not enough to reverse losses but continues at the open today. IVYCST (+0.125) holding firm even as Prime Minister Patrick Achi and the cabinet tendered their resignations ahead of a cabinet reshuffle. ANGOL also recovering from the recent slump after the country shelved plans to raise additional finance in Eurobond markets, instead banking on the windfall from oil revenues.