U.S. stocks declined on Friday after August jobs data released did little to alter the view that the Fed Reserve would press ahead with a large interest rate hike in late September. August employment data showed the U.S. economy added 315,000 new jobs last month which brings U.S. unemployment rate to 3.7%, missing the 3.5% level economist had projected. Subsequently, Dow Jones declined 1.1% to finish at 31,318.44, S&P 500 declined 1.1% to finish at 3,924.26 while Nasdaq 100 declined 1.3% to finish at 11,630.86. The 10-year yield fell 7.4 basis to 3.190%. Gold spot price fell 6.4% to $1,712.19 per ounce while WTI crude oil declined $.53 to $86.87 per barrel.
Natural gas prices jumped as much as 35% as Russia halted its biggest pipeline to Europe indefinitely, plunging the region deeper into crisis. Gazprom PJSC made a last-minute decision late Friday not to turn Nord Stream pipeline back on after three days of maintenance after Group of Seven leaders agreed to implement a price cap on Russian oil as Kremlin continued its offensive in Ukraine. In the meantime, Ukrainian president Zelenskiy met his top military commanders over the weekend to discuss the situation on the front line with Ukrainian forces trying to advance in the Kherson region, which Russia occupied shortly after the start of the invasion. Ukrainian forces recaptured two communities in the country’s south, Zelensky said on Sunday, offering a rare commentary on its counteroffensive that has been held in secrecy. Despite of the considerable advances in energy prices, Russian stock market has quickly turned to red zone this Monday morning with IMOEX currently down 0.8% to 2,452. Energy giants Gazprom and Lukoil, mining company Norilsk Nikel and Sberbank led the losses along with Yandex, while Novatek gained. The analysts are still assessing potential fundamental impact from Gazprom’s unprecedented interim dividend with most seeing Russian equity market as “Hold”. Russian ruble stayed mostly flat at the beginning of the week losing 0.3% against the US Dollar and gaining around 0.4% against the Euro. The Russian currency has jumped nearly 40% against the dollar since after initial collapse following the start of Russian invasion to Ukraine on the 24th of February. The current ruble strength is perceived as negative by most analysts, as strong currency affects Russia’s income from oil and gas exports, which feeds into around 45% of its federal budget. In bonds news, holders of Uralkali Eurobonds with maturity in 2024 agreed on a new payment mechanism with payments to bondholders, whose rights are accounted in Russian depositories, directly in rubles and payments to all other bondholders to be made in accordance with original terms and only after all relevant regulatory licenses form the competent authorities are obtained.
A mixed open for SSA following Friday’s rebound. Oilers rallied as Brent recovered with GHANA (+2.125) outperforming amid short covering and duration addition; ANGOL (+1.625) and NGERIA (+1.00) also saw demand skewed towards longer tenors. KENINT (+.50) had just about uniform demand across the curve and opens flat ahead of a ruling on Azimio’s electoral challenge.