Markets Dropped after FED Comments

US indices dropped yesterday after the comments of FED officials: some of them highlighted that uncertainty is still too high and “the most difficult part of the recovery is still ahead of us”.The FED chair Jay Powell argued for Congress to agree on a new round of stimulus to support the economic recovery. S&P closed 2.4% lower while Nasdaq dropped 3%. The yield on 10Y USTs added 1bps and closed at 0.673%.

European markets rallied on Wednesday as ECB suggested that the EU make the pandemic fund permanent. Stoxx added 0.6%, DAX gained 0.4%. The yield on 10Y DBR closed flat at -0.506%.

Asian stocks are falling this morning following US. CSI dropped by 1%, Hang Seng is down by 0.9%.

Russian Eurobonds slightly recovered on Wednesday; RUSSIA 47 gained 0.5 point in price while other bonds closed 10-30 bps higher across the curve. RUB lost 1.2% vs USD and closed at 77.04 level. Ministry of Finance sold OFZs worth RUB 120bn though its weekly auctions yesterday – RUB 110 bn of RFLB28 FRN and RUB 20 bn of RFLB 4.5% 25.

On the SSA front, we saw a moderate sell off. ANGOL and Ghana sovs dropped around 0.5 point in price on average, NGERIA lost around a point across the curve.