US equities finished lower on the first day of trading giving up early gains. Dow Jones lost 11 points to 33,136, S&P declined 0.5% to 3,824 and Nasdaq was down 0.8% to 10,387. Equity news was light at the beginning of the year, but Tesla shares fell after company missed on Q4 results expectations. Treasuries rates were lower with yields on 10-year and 30-year notes both declining 11 bps to 3.77% and 3.87% respectively. US Dollar weakened this Wednesday giving up Tuesday’s gains with Dollar Index down 0.7% this morning to 103.638. The Dollar climbed 1% on Tuesday as market sentiment was dented by IMF warning about a likely global recession in 2023. However, Dollar strength ran out of steam with markets now awaiting the release of Fed’s meeting minutes from December. In yesterday’s data Manufacturing PMI remained contractionary at 46.2 preliminary read, while construction spending unexpectedly rose 0.2% in November.
German Foreign Minister Bearbock said there’s little sign that Russian President Putin plans to end his was in Ukraine anytime soon “despite international efforts”. Putin is set to hold talks Wednesday with Turkish President Erdogan with Turkey reportedly seeking to play the role of intermediary between Russia and Ukraine. In the meantime, Russia raised the death toll in a Ukrainian rocket attack on the New Year’s Day to 89, the largest such loss since the start of the invasion to Ukraine, blaming soldiers’ mobile-phone use for exposing their location. Russian stock market fluctuated this Wednesday morning as oil and gas prices continued to drop. IMOEX was down 0.34% to 2,165 and RTSI was down 0.97% to 936. Gaz companies Gazprom and Novatek were among the biggest losers, while gold producers Polyus and Polymetal gained. Russian rouble fell again this morning against US Dollar, Euro and Yuan with USDRUB up 0.37% to 71.51 and EURRUB up 1.11% to 75.91. Russian bond yields were off with 10-year benchmark rouble bonds down 6 bps to 10.3%. Russia plans to sell as much as 100 billion roubles of notes today with maturity up to five years, Finance Ministry said. In other news, Russia has formally asked to join the China-initiated World Trade Organization dispute over US export controls imposed by Biden administration to limit China’s access to advanced US chips.
European stocks opened higher this Wednesday, continuing the positive start to the new year ahead of the release of more important economic data. The DAX futures traded 0.3% higher, CAC 40 futures climbed 0.3%, while the FTSE 100 futures rose 0.3%. European stocks closed higher on Tuesday, helped by German inflation coming in below expectations, easing for a second month in a row in December due to falling energy prices. EURUSD traded 0.2% higher at 1.0568. Today focus today in Europe will be on the French inflation data, as well as PMI from a number of European countries.
The NTB secondary market was quiet as average yields closed flat across the curve. The average yields across the short, medium & long tenors remained unchanged. In the OMO secondary market, average yields also closed flat across the curve with the short, medium & long ends remaining unchanged. The FGN bonds secondary market closed on a positive note with average yields across the curve dropping by 15bps. Average yields on the short, medium & long tenors dropped by 1bps, 45bps & 3bps respectively. The Mar 2027 bond was the best performer. The DMO started offering 2 & 3-yr Savings Bonds due Jan 11, 2025 & 2026 @ 9.60% & 10.60% respectively.