Bank stocks higher as Turkey eases lending rules

US stocks closed higher on Monday on reports that former Fed Chair Janet Yellen could become the Biden administration Treasury Secretary and positive results from the AstraZeneca COVID-19 vaccine. The DOW led, up 1.12% while the S&P and the NASDAQ closed 0.56% and 0.21% higher respectively. Yield on 10Y USTs closed higher at 0.8537%.

British PMI figures for November improved amid an uptick in manufacturing which recorded 55.2 from October’s 53.3. Services inevitably took a hit with the lockdown in effect recording 45.8 from October’s 52.3 to notch a composite figure of 47.4 for the month. The same trend was observed across the Channel with Euro area manufacturing improving to 53.6 while services contracted to 51.3. The pound closed higher at $1.3321 while yield on 10Y UKTs closed higher at 0.318%.

Asian stocks were mostly higher on Tuesday amid the continuing risk-on sentiment. The NIKKEI rallied 2.50% while the ASX and the HANG SENG closed 1.25% and 0.39% higher respectively; the CSI was 0.34% lower however.

The Borsa Istanbul Banks Index was up some 3.5% early Tuesday following an announcement by the banking regulator that the asset ratio rule was going to be repealed. The rule which compelled lenders to extend credit else risk fines eventually led to a wider trade deficit and increased pressure on the lira. The lira rose some 0.3% on the announcement having closed at 7.8836 to the dollar on Monday.

Brazilian economists continued their upbeat forecast of the economy raising their inflation and benchmark interest rate forecasts for end 2021. The latest central bank survey forecasts the Selic to rise to 3% from the current 2% while inflation will tick higher to 3.40%. The survey estimates are in stark contrast to policymaker statements; the central bank pledged to hold rates for the foreseeable future as well as remarked that inflation expectations remain below target. The real closed weaker at 5.4337 to the dollar.

Kenya is looking to borrow as much as $2.3 billion from the IMF to help respond to the COVID-19 pandemic. The loan application, if successful, will see some $725 million disbursed by June according to the government’s plan. Constraints on finances have pushed the government to scale back on its Big Four Agenda and has seen the government signal openness to the G20’s DSSI facility. KENINT 32s traded higher in the low 114s.