U.S. equities declined while treasury yields rise

U.S. stocks finished lower on Tuesday after a volatile session saw all three major benchmarks loosing. Lingering concerns about the economic fallout from the European energy crisis were again in focus on Tuesday, as was the Fed Reserve’s determination to battle inflation by aggressively hiking interest rates. Meanwhile, rising Treasury yields and a stronger dollar were seen weighing on stocks. Subsequently, Dow Jones declined 0.6% to finish at 31,145.30, S&P 500 declined 0.4% to finish at 3,908.19 while Nasdaq 100 declined 0.7% to finish at 11,544.90. The 10-year yield Treasury rose 14 basis points to 3.337%. Gold spot price rose 0.2% to $1,714.18 per ounce while WTI crude oil dropped to $85.08 per barrel.

Russian Economy Minister Maxim Reshetnikov confirmed that the government prepared an internal report that the country may face a deeper recession than has been previously publicly acknowledged. In a sign that Western sanctions on its military and economy are starting to bite, as reported by US officials, Russia is now set to buy millions of rockets and artillery shells from North Korea to use in its war against Ukraine. The move would violate UN arms embargo that Russia voted for. In the meantime, after several days of confusion and a deliberate lock down on information, Ukrainian officials have confirmed the recapture of at least two villages, pushing back against a growing Russian narrative of failure. On Monday, Russia has postponed a planned referendum in Kherson on joining Russia, citing security reasons. Russian stock market dropped for a second day on Wednesday as the prices of oil and natural gas retreated, and investors weighed the impact of international sanctions and the war in Ukraine. Both IMOEX and RTSI were down this morning and trade at 2,424 and 1,247 respectively. Energy companies Lukoil, Gazprom and Rosneft were among the worst performers along with Sberbank and Novatek. Aeroflot shares gained as much as 7.4%. After four sessions of losses Russian ruble gained against the US Dollar on Tuesday afternoon and continued trading higher this morning. USDRUB is currently flat on the day at 61.21 and EURRUB is 0.3% higher at 60.71. Yields on Russian government bonds fell helped by positive inflation data on Wednesday and a commentary from the central bank’s management on the September 16th meeting about a possible pace of key rate cuts. 10—year benchmark ruble bond yields are currently 2 bps lower at 8.36%.

SSA opens tilted towards the downside following Tuesday’s rally. Tuesday saw the space pick up after a muted open, albeit closing off highs as rates shot up and Brent dropped. KENINT (+1.50) and GHANA (+1.50) outperformed but only the latter opens 0.25pts firmer while KENINT is flat. ZAMBIN (-0.75) moving lower after an IMF release indicating that the country needs $8.4bn cash debt relief over the course of the 38-month program.