Stocks closed higher in choppy trade, after the Fed Reserve announced a 75-basis point rate hike yesterday, its largest increase in nearly 30 years, as the central bank works to quickly quell inflation that’s proven to tame from a four-decade high. In a statement, Fed chair Jerome Powell said they now expect the central bank’s policy rate to move to about 3.4% by the end of the year. They also expect the economy to slow to a 1.7% growth rate this year. Subsequently the S&P 500 increased 2.5% to finish at 3,789.99, Nasdaq 100 increased 2.5% to finish at 11,099.15 while Dow Jones increased 1% to finish at 30,668.53. The 10-year yield Treasury pulled back to 9.3 basis points to 3.389%. Gold price gained $8.80 to $1,822.30 per once, while WTI crude oil declined $1.24 to $117.69 per barrel.
While Ukraine’s Luhansk is being attacked by Russia from all possible directions, the leaders of France, Italy and Germany arrived at Kyiv this Thursday morning in a diplomatic show of support to the beleaguered country. President Biden announced another $1 billion in security assistance to the Ukraine on Wednesday, which is struggling back to hold back the intense Russian attacks. The package includes artillery, rocket systems, coastal defense weapons and ammunition. Russian equities gained for a third consecutive day as oil rose and natural gas prices in Europe jumped after Russia cut supplies through the largest link to the continent to less than half of usual volumes. IMOEX was up this morning by 1.22% at 2347 with fertilizer producer PhosAgro, oil company Tatneft and gold Producer Petropavlovsk leading the gains. Russian sovereign bonds continued trading flat, despite of the trading ban for US investors, with Russia 28 offered in mid 30s and Russia 47 in mid 20s. Russia’s largest shipping company, Sovcomflot has announced that it would consider alternative payment options on its 2023 bonds, which is due today, and is “currently technically impracticable due to the refusal of the paying agent to accept the payment”. Ruble held on to the highest levels against the US Dollar since March 2018 supported by a strong trade balance and high prices for the main exports. USDRUB was just above 57 this morning and EURUB at around 59.
A mostly weaker open to the space following the rally that preceded the Fed’s 75bps hike on Wednesday. GHANA (+0.25pts) holding up following yesterday’s 3-point gain as short covering added to the already bullish market; demand at the open skewed towards short tenors with 29s also quite bid. ZAMBIN (-0.125pts) succumbing to the weakness as creditors meet up with the government for restructuring talks.