US stocks closed lower on Tuesday for a second day as we await what is deemed to be the worst bout of inflation to hit the U.S. economy in four decades to be announced today. Traders remain wary about the prospects for corporate profits also amid signs of slowing global economic growth, although declining commodity prices have spurred hopes that the Fed Reserve might be able to cut interest rates as soon as next year. Subsequently, the Dow Jones declined 0.6% to finish at 30,981.33, S&P 500 declined 0.9% to finish at 3,818.80 while Nasdaq 100 declined 1% to finish at 11,264.73. The 10-year yield Treasury fell 3.2 basis points to 2.958%. Gold price declined $5.10 to $1,726.60 per ounce while WTI crude oil price dropped $7.50 to $96.59 per barrel.
With Russia running supply of gas at only 40% of normal levels after a supply cut earlier this year, the planned reopening of a key Russian gas pipeline next week has been turning into a key event for Europe next week. In the meantime, the death toll from a Russian rocket strike on an apartment building in the Donetsk region rose to 43 people, as Russian forces continued pressing forward with their ground assault on the eastern area. Russian stock market has extended its weekly losses as oil has dropped to a three-month low level and European natural gas buyers got concerned with Nord Stream pipeline reopening. IMOEX was down 1.23% at 2,108 with energy giants Gazprom and Lukoil among the worst performers along with Sberbank and Yandex. After Russia’s Finance Minister Siluanov reiterated possible interventions using currencies of friendly countries and said that ruble was not expected to strengthen beyond 50 rubles per US Dollar Russian ruble remained mostly stable with USDRUB trading at around 59 and EURRUB at 59.30. Helped by restructuring of import supply chains and interventions, some analysts predict USDRUB to go as high as 65 by the end of the quarter. 10-year benchmark ruble bonds yields trading inside Russia were up 1 bp at 8.4%.
The weak run continues for SSA at the open with GHANA (-0.875pts) particularly heavy and long end trading sub-50 again. KENINT (-0.125pts) also weaker amid reports that the government has not fulfilled key commitments under the current IMF programme.