Mixed session on Wall Street while russian oil cap on focus

On Friday Wall Street closed in red on a strong report on the US labor market, which may give rise to a tightening of the Fed’s rhetoric. The Dow Jones added 0.1% to 34,429.88, the S&P 500 fell 0.12% to 4,071.70 level while Nasdaq lost 0.18% to 11,461.50. Last week saw the S&P 500, Nasdaq and the Dow Jones Industrial Average all notch up their second weekly gains in a row, with a 2% rise in the Nasdaq leading the way. The S&P added 1% for the week while the Dow was up 0.2%. DXY index which measures the greenback against six peers fell 0.17% to 104.545. On the bonds market benchmark UST 10Y reached 3.5151 from its U.S. close of 3.4862 % on Friday. The two-year yield, which tracks traders’ expectations of Fed fund rates, touched 4.3210 compared with a U.S. close of 4.2717.

The cap and EU ban on seaborne imports of Russian oil into the bloc came into force this Monday. The EU in tandem with G7 agreed to impose a cap at $60 a barrel on Russian crude, while banning most seaborne imports from Russia. The EU is also looking to impose restrictions on Russia’s drone sector as a part of new sanctions package it aims to approve next week. Russian stock market rose this Monday morning as oil and metals advanced after China moved to ease Covid restrictions and OPEC+ decided to keep the output steady over the meeting last weekend. IMOEX was up 0.93% at 2,200 and RTSI was up 0.74% at 1,115.8.  Shares n Sberbank, Lukoil, Norilsk Nickel and Yandex were the biggest contributors to the gains, while retail Magnit and online recruitment service HeadHunter lost the most. Russian rouble retreated against the dollar and euro extending its last week’s drop with USDRUB up 0.14% this morning to 62.14 and EURRUB up 0.47% to 65.47. Russian bond yields were slightly higher with 10-year benchmark rouble bonds up 1 bps to 10.14%. Russian Finance Ministry transferred 3.3 billion roubles to payment agent for coupon payments on sovereign Eurobonds with maturity in 2025. Funds were received by NSD. Data wise, Russian PMI rose in November to 50 from 45.8 in October, while new orders rose to 50.1 versus 48.2.

EU markets opened lower on Monday as investors concerns about the growth perspective of China economic despite easier anti-COVID restrictions on Chinese biggest cities. This morning the DAX futures contract in Germany traded 0.35% lower at 14,478.05 level, the FTSE 100 futures contract in the U.K. added 0.32% to 7,578.08 points, while CAC 40 futures in France traded 0.28% lower at 6,727.45. Investors will also be focusing on on the release of the final November PMI data for the region, which are likely to show the Eurozone heading into a recession as the year comes to an end.

SSA opens largely firm as it attempts to recover losses incurred late Friday. Rates sold in the aftermath of a strong US NFP print pushing risk assets lower with ANGOL (-.625) and NGERIA (-.50) bearing the brunt of the selling in the space. IVYCST and SENEGL managed to hold onto earlier gains however, to close +.125; the latter’s rating was affirmed at B+ by S&P. GABON and REPCAM also had their ratings affirmed with the former maintaining its Caa1 rating by Moody’s while the latter’s B rating was also retained by Fitch.

The FGN bonds secondary market closed on a mildly positive note as average yields closed lower by 1bps across the curve. Average yields on the short & medium tier closed flat however, the long end of the curve dropped by 2bps. The Apr 2037 bond was the best performer.

The NTB secondary market closed on a flat note as yields across the short & medium tier of the curve remained unchanged. There was a marginal drop at the long end as yields closed lower by 1bps. There was some buying interest at the long end of the curve. In the OMO secondary market, yields remained unchanged across the curve.