Angola positive after Moody’s upgrade
US stocks rebounded on Monday following a poor showing the previous week which saw the benchmarks shed at least 1.6% each. The DOW led gains up 0.76% while the S&P was up 0.23%; the NASDAQ closed just lower, shedding 0.07% with Alibaba slumping following a Financial Times report that Chinese regulators want to break up Alipay. Yield on 10Y USTs was lower at 1.3259%.
UK employment figures rose above pre-pandemic levels after posting a 241,000 increase in August according to the Office for National Statistics; job openings also surged 35% in the quarter to August to a record 1.03 million as firms battled to attract employees. A key test will come in October when the government’s furlough programme ends with 1.6 million having been part of the scheme in August. The pound was slightly firmer at $1.3840 while the yield on 10Y UKTs closed lower at 0.745%.
Asian stocks were mixed on Tuesday ahead of August’s US CPI print later in the session. The CSI and HANG SENG remained depressed with concerns over Chinese regulatory crackdown weighing down; they were trading 1.49% and 1.30% towards the close of the session. The NIKKEI was more positive, rising 0.73% while the ASX rose 0.16% with improvement in Australian business confidence and conditions outweighing the extension of the Melbourne COVID-19 lockdown till mid-October.
Analysts once again upped their Selic forecasts as inflation pressures remain elevated. The median forecast was upped to 8% from 7.63% with some analysts going on to predict another percentage point increase by February 2022. GDP forecasts continued their downtrend as well with end-2022 forecast down to 1.72%. The real closed firmer at 5.2158 to the dollar while BRAZIL 30s were flat, trading about 3.85%.
Moody’s upgraded Angola’s long-term foreign currency rating to B3 from Caa1 on Monday on the basis of improvement in the sovereign credit profile. On the back of high oil prices, debt-to-GDP is expected to decline to 95% in 2021 from 122% in 2020 ultimately declining to 60% of GDP by 2025. Kwanza stability has also been factored in the report with the currency having hovered about the 650-mark relative to the dollar since Q4 2020. ANGOL Eurobonds were up .25pts in early trading on average.