U.S. stocks finished higher on Monday for the fourth straight session ahead of August CPI report due today to show signs of easing price gains. Also, investors appear comfortable with the prospect of a possible 75 basis point interest rate hike by the Fed Reserve at the conclusion of its meeting on September 21.
Subsequently, Dow Jones increased 0.7% to finish 32,381.34, S&P 500 increased 1.1% to finish 4,110.41 while Nasdaq 100 increased 1.3% to finish at 12,266.41. The 10- year yield Treasury advanced 4 basis points to 3.36%. Gold spot price declined 5.7% to $1,724.54 per ounce while WTI crude oil gained $1.67 to $87.78 per barrel.
Ukrainian forces have recaptured more than 6,000 square kilometers in the east and south of the country this month, Ukrainian President Zelenskiy commented. At the same time, US Secretary of State Antony Blinken said Ukraine had made “significant progress” in its counteroffensive but cautioned that it was “too early to tell exactly where this is going”. Russia still controls about one-fifth of Ukrainian territory, dwarfing 6,000 square kilometers Ukraine says it retook. Russian stock market advanced this Tuesday morning gaining for the third consecutive session with IMOEX up 0.12% to 2,453 and RTS up 0.54% to 1,288. As rising oil prices outweighed a drop in natural gas prices and further military setbacks in the invasion in Ukraine, energy giant Lukoil was among the best performers along with Sberbank and Norilsk Nickel. Oil pipeline operator Transneft retreated. Russian ruble has risen for a fourth consecutive session to the highest level since the start of the month with USDRUB down this morning 0.18% to 60.06 and EURRUB flat at 60.88. As some analysts commented, with a current trade surplus, ruble can afford to ignore a shift in sentiment on foreign market. Russian government bonds advanced with 10-year benchmark ruble bond yields down 2 bps to 8.42%, as investors look toward Friday’s central bank meeting on monetary policy. The market expects policy makers to cut the rate to 7.5% from 8%, which is already included in OFZ prices. In the event of a bigger rate cut analysts expect OFZ curve to decline by 25-50 bps. In corporate bonds news, Rosneft has offered at least 10 billion in yuan denominated bonds.
A mixed open to SSA ahead of US CPI data later in the session. Monday saw a sustained rally that had KENINT up 2.125pts to lead gains while NGERIA closed 1.50pts up as late supply saw some of the earlier rally reverse. ETHOPI (-.25) lower however even as the Tigray government signaled openness to a cease-fire and peace talks without pre-conditions.