Turkey inflation rises as lira rout continues.
US stocks closed higher on Monday despite a sell-off in tech ahead of Tuesday’s elections. The DOW led, up 1.59% while the S&P was 1.23% higher. Tech stocks held back the NASDAQ which closed a comparatively modest 0.42% up. Yield on 10Y USTs closed lower at 0.8434%.
Asian markets followed Wall Street’s lead closing higher on Tuesday as expectations of more stimulus post elections grew. The HANG SENG and the CSI gained 1.96% and 1.42% respectively while the ASX rose 1.93% as the Reserve Bank of Australia shaved 15bps off the benchmark rate to a record low 0.1%. The NIKKEI was closed for a Japanese holiday.
Turkey’s inflation rose 11.89% YoY in October as the lira continued its slide driving import costs higher. The rise was largely driven by food costs which soared 16.5% in the month although energy costs rose 3.98%, down from September’s 6.95%. The lira, down 40% so far in 2020, closed at yet another record low of 8.4264 against the dollar and had weakened about 0.4% on the data release. TURKEY 30s were about a point lower, trading in the high 128s.
Brazil created a record 313,000 formal jobs in September marking a strong recovery for Latin America’s biggest economy from the COVID-19 downturn. The figure, outperforming a Bloomberg-poll median of 242,500, marks a third straight month of gains and the biggest monthly gain since series began. Overall unemployment, including informal and self-employed sectors, rose to a record 14.4% in the 3 months to August, however. BRAZIL 30s were higher, trading in the low 102s.
Oil recovered from session lows to close higher on Monday following a meeting between the Russian Energy Minister and producers to discuss the possibility of delaying the planned easing of OPEC+ cuts by 3 months. Oil had sold off earlier in the session amid rising Libyan supplies and dwindling demand as Europe instituted various forms of lockdowns.
SSA closed higher on Monday as oil shrugged off pressures in the earlier part of the day. The usual oil names – GHANA and NGERIA – saw increased demand as the session ended closing some 0.75pts up; ANGOL pared earlier losses but could only close 0.5pts of opening levels. IVYCST saw the biggest gains on the day however as the incumbent president, Alassane Ouattara, looked set to win – electoral commission confirmed a 94.3% victory early on Tuesday: no significant negative local reaction was observed and the bonds closed 1.5pts higher.