U.S. stocks extended a losing streak to four sessions on Wednesday as all the three major benchmarks recorded around 4% of losses for the month of August. Ahead of the opening bell, ADP estimated that U.S. private-sector employment rose 132,000 in August, while annual pay rose 7.6%. Subsequently, Dow Jones declined 0.9% to finish at 31,510.43, S&P 500 declined 0.8% to finish at 3,955 while Nasdaq 100 declined 0.6% to finish at 11,816.20. The 10-year yield Treasury advanced to 3.131% from 3.107% in previous session. Gold spot price declined $2.30 to $1,734.00 per ounce while WTI crude oil declined $2.09 to settle at $89.55 per barrel.
G7 is set to hold talks this week on allowing global purchases of Russian oil at a capped price. The move is aimed at easing energy market pressures and reducing overall Russian revenues from crude. The plan would allow purchasers of Russian oil under a capped price to continue crucial services, including financing and insurance for tankers, while the EU, UK and Switzerland plan to ban their companies from providing those services for Russian oil companies from December. At the same time, Russia is planning to hold major military exercises involving China and India starting this Thursday in Russia’s far East, as Putin pushes back against attempts by the US and allies to isolate him over invasion to Ukraine. The regular exercises bring together member states of the Shanghai Cooperation Organization and Collective Security Treaty Organization of former Soviet republics. Russia’s equity market has traded lower this Thursday morning after jumping the most in more than four months the day before, following Gazprom’s proposal to pay its first-ever interim dividend. Both IMOEX and RTS lost around 0.5% by now and trade at 2,392 and 1,251 respectively, as prices of oil and gas declined, while Russian manufacturing unexpectedly improved. Sberbank, Gazprom and Lukoil have been the worst performers today, while Yandex and PhosAgro gained. Russian ruble snapped two days of gains against the dollar and euro with both USDRUB and EURRUB up around 0.1% at 60.20 and 60.30. The top government and central bank officials are discussing a plan of buying as much as $70 billion in yuan and other “friendly” currencies this year to slow the ruble’s surge. 10-year benchmark ruble bonds yields were up 3 bps at 8.46%. Russian bonds continued trading higher on the international market rising more than twice from the face value of 20% since July 22, when US Treasury lifted restrictions.
SSA opens weaker as risk sentiment remains negative. The space closed weaker on Wednesday as rates reversed early firming as EU CPI surprised to the upside and reinforced bets on steep hikes from major central banks. GHANA (-3.00) again bearing the brunt amid heavy selling; curve closed some 2pts off lows as some short covering was seen into the close. ZAMBIN opens flat after finally getting IMF board approval for its $1.3bn program with an immediate $185mn disbursement.