U.S. equities accelerated ahead of thanksgiving holiday

US equities accelerated to the upside to finish solidly higher yesterday amid a slew of data before closing for the Thanksgiving holiday break today. Dow Jones increased 0.3% to 34,194, the S&P 500 was up 0.6% to 4,027 and Nasdaq advanced 1% to 11,285. The move upward came following the release of the minutes from FOMC which indicated some caution among the Committee members. The economic calendar was robust, as the durable goods orders came in much stronger than expected, along with sales and consumer sentiment. However, not all the data was positive with weekly initial claims rising and preliminary manufacturing and services output both showing contraction Treasury yields were lower with 10-year note yield decreased 5 bps to 3.7% and the 30-year bond declined 9 bps to 3.74%. US Dollar fell with DXY down 0.12% to 105.835.

European leaders are set to reach a deal as early as Thursday on a price cap level for Russian oil exports despite sharp splits over the plan. Identifying the ideal price is the final hurdle in shaping the Group of Seven-led plan, which US officials have pushed. In the meantime, Ukrainian forces repelled Russian military assaults in the Donetsk region, including Bakhmut, as the country struggled to cope with power and water outages brought by Russian missile attacks. Russian stock market fluctuated on Thursday as European gas prices stayed elevated, while oil prices were lower. Both major Russian stock indices are currently up with IMOEX gaining 0.36% to 2,120 and RTSI up 0.93% to 1,159. Energy giants Novatek and Rosneft were the biggest losers, while diamond producer Alrosa and air carrier Aeroflot gained. Russian rouble has strengthened against US Dollar and Yuan supported by the ongoing tax payments period and delay with EU agreement on oil price cap. USDRUB was down 0.34% to 60.36 and EURRUB was flat at 62.81 this morning. The yield on the 10-year OFZ bond rose to 10.1% in November, the highest in two weeks, as investors digested the country’s credit risk after the federal government changed the budget law to account for increased military spending.

European PMIs for November remained in contraction territory albeit generally higher than expected as recession concerns loom; the S&P Composite PMI came at 47.8 against an expected 47.0. Comparable figures for Germany showed a similar trend – 46.4 vs expected 44.9 – pushing 10Y bund yields down 10bps from session high to close at 1.93%; the trend continues at the open with the benchmark bonds trading 1.878% at 0830 GMT. The Stoxx 600 opens lower, trading 0.05% lower at 0830 GMT having gained 0.60% on Wednesday.

The bonds secondary market closed on a negative note as average yields closed higher by 13bps across the curve. Average yields on the short & medium tier rose by 8bps and 22bps however, the long end of the curve remained unchanged. The Mar 2035s bond was the worst performer. The NTB secondary market closed on a flat note. Average yields remained unchanged across the short and medium tier of the curve. The long end dropped marginally by 1bps. Sept 2023 & Oct 2023 witnessed some buying interest as they dropped by 1bps each. In the OMO secondary market, yields closed flat across the curve. **The new N200, N500 & N1000 bills were officially launched by the President on Wednesday- they are set to replace the former ones effective Dec 15, 2022.