U.S. markets focused on midterm elections

U.S. markets ended Monday’s trade session sharply higher with big tech Meta, Alphabet Microsoft best performers while investors focused on US midterm elections. Republicans could win these elections, which may be perceived by the market as a positive signal while they probably won’t make tax hikes and any extra expenses form the budget.

On Wall Street the Dow Jones rose 1.31% to 32,827.00 points, the S&P 500 climbed 0.96% to end the session at 3,806.90 points, while the Nasdaq gained 0.85% to 10,564.52 points.

The DXY index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.67% to 110.04.

Focus this week will be on U.S. consumer prices data for October, due out on Thursday, for clues about how much the Fed’s rapid interest rate hikes are helping cool down the economy.

Investors are divided about whether the Fed will raise interest rates by 50 basis points or 75 basis points at the U.S. central bank’s meeting in December.

Russia has stepped up the evacuation of civilian institutions from the occupied Ukrainian city of Kherson and has started building anti-tank defenses around the city of Mariupol, as its military forces prepare for a Ukraine counterattack. Russia’s decision to mobilize 300,00 reservists has allowed Russian forces to stabilize the front line in most areas, halting the Ukrainian offensive that reclaimed large parts of the Kharkiv, Donets and Kherson regions in September and October. However, Russian attempt at regaining the initiative have been proving unsuccessful with Russia turning to missile and drones’ attacks in recent weeks damaging 40% of Ukraine’s electricity infrastructure. Russia’s equity market slid on Tuesday led lower by the biggest lender, Sberbank, and internet company Yandex. The IMOEX lost 0.58% to 2,195 and RTSI lost 0.62% to 1,133. IMOEX has been trading just 2.7 times projected earnings, compared to 6-times just a year ago. This Tuesday morning Sberbank lost 0.8% and Yandex traded 1.4% lower. The retailer of children clothing Detskiy Mir slumped as much as 20% after announcement of a possible transformation into a private company. Russian rouble has opened mostly flat gaining just 2 copecks against US Dollar to 60.98 and 8 kopecks against the Euro to 60.84 after closing at highest level in a month on Monday. Dollar weakness and higher oil contributed to rouble strength with some analysts predicting a psychological level of 60 roubles for US Dollar to be hit this week. The yield on the Russian 10-year OFZ bond eased slightly to 9.9% from the three-week high of 10% hit on November 2nd, signaling a slight rebound in demand for government debt after the Ministry of Finance said that higher oil prices should restore some of Russia’s lost energy revenues.

EU stock markets opened higher on Tuesday as as investors digested a flurry of corporate earnings ahead of the U.S. midterm elections.

The DAX index in Germany traded 0.28% higher at 13,571 levels CAC 40 in France rose 0.1% to 6,02 points while the FTSE 100 in the U.K. climbed at 0.07% to 7,295 level. The focus of the European data calendar will be Eurozone retail sales for September, which are expected to grow 0.4% on the month, still down 1.3% on the year as consumers struggle with rising prices.

SSA opens tilted towards the downside as the bullish run takes a breather from continues hawkish rhetoric from central banks which has seen rates tick higher. ANGOL (+2.00) leading the reversal yesterday as supply came later in the session to shave some 1.5pts off the day’s highs. KENINT (+2.75) and NGERIA (+3.00) outperforming yesterday as supply remained thin; both open comparatively muted.

The local FI market remained quiet. The bonds market saw little activity and closed flat across the curve. There was little activity in the Treasury Bills market. Yields closed lower by 1bps across the curve.