The first day after a long weekend was marked by a decline in major US indices. The main trigger for risk-off was disappointing data from Tesla, which stated that the company would be forced to cut production at its plant in Shanghai. Shares of the company fell 11.4% to their lowest level this year at $109.1. The Dow Jones added 0.11% to 33,241.56 level, the S&P 500 closed down 0.41% to 3,829.25, while the Nasdaq Composite dropped 1.38%, at 10,353.25 points. DXY index which measures the greenback against six peers fell 0.1% to 104.179. On the bonds market benchmark UST 10Y reached 2,81% to 3.5151. The two-year yield, which tracks traders’ expectations of Fed fund rates touched 4.3741.
Russia has banned exports of Russian crude oil and refined products to foreign buyers that adhere to a price cap, the restriction that should begin in February and last until July 2023. However, Russian government held back form the most drastic retaliatory measures further disrupting global oil supply. The market price for Russia’s flagship crude is already trading below the $60 threshold set by the EU and G7. Meanwhile, Ukrainian President Zelenskiy said his government is preparing to participate in the World Economic Forum in Davos next month to discuss the reconstruction efforts of the country. Russian forces continued offensive operations around Bakhmut and Avdiyivka in the eastern Donetsk region, while trying to improve their tactical position on the Lyman axis to the north. Russian stock market slid this Wednesday as investors weighed the impact of a continued decline in European natural-gas prices, international sanctions and war in Ukraine. IMOEX lost 0.37% to 2,142 and RTSI lost 1.23% to 949. VTB Bank and retailer Magnit were among the biggest contributors to the slide. Oil company Surgutneftegas and online recruitment service Headhunter gained slightly. Russian rouble traded lower this morning amid a continued speculation that Russian officials are comfortable with a weaker currency. First Deputy Prime Minister Belousov said Tuesday, that right now exporters need a weaker rouble, at 70-80 per dollar, to offset their expenses. USDRUB was up 0.8% to 71.2 and EURRUB was up 0.59% to 75.59. Russian bond yields were mostly flat this morning with a 10-year benchmark rouble bond yields down 1 bps to 10.34%. Russia’s NSD will request the Belgian Treasury about the condition of the EU council regulation allowing the release of clients’ assets. In other news, India and Russia have begun settling bilateral foreign trade in rupee, with a few transactions involving Russian firms having taken place recently.
European markets open mostly flat on Wednesday as investors seen that consumer sentiment in Eurozone becomes higher. China and Hong Kong have eased anti-COVID restrictions, and it can bring new optimism in the new year. On the stock markets the DAX index in Germany traded 0.11% lower at 13,995.55 level, the FTSE 100 in the U.K. added 0.84% to 7,536.01 points while the CAC 40 in France traded flat at 6,557.09 level. European stocks mostly posted gains on Tuesday, helped by the news that China announced it will no longer require inbound travellers to go into quarantine from Jan. 8, a major step towards relaxing its stringent curbs.
SSA opens firm as the Christmas lethargy appears to have been shaken off. Bonds closed mostly lower in Tuesday’s half session as souring sentiment put a damper on risk assets; an uptick in rates – 10Y UST up 9bps to 3.84% – outweighed the move higher in Brent on further opening in China. GHANA (+.125) just about held onto gains even as the restructuring process on local debt fails to meet targeted timelines after another deadline extension.
The NTB secondary market closed on a flat note as average yields remained unchanged across the curve. Average yields across the short, medium & long ends closed flat. The Mar 9, 2023 & Oct 23, 2023 bills witnessed mild buying interest. In the OMO secondary market, average yields closed flat across the curve.
The FGN bonds secondary market closed on a positive note with average yields across the curve, closing lower by 10bps. Average yields on the short & medium ends remained unchanged while the long end dropped by 20bps. The Jan 2042 bond was the best performer while the Mar 2035 bond was the worst performer.