US stocks climb, sell off eases as investors continue to monitor war in Ukraine

U.S. stocks fell, Bonds yield rose on greater concerns about inflationary risks and the effect of aggressive Fed monetary policy tightening cycle. The S & P 500 closed at 4,488.28, down 0.27%, Nasdaq 100 dropped 1.34% to 13,711.00 while Dow was at 34, 721.12.   The 10-year UST yield touched 2.77% but closed 1pb firmer at 2.76% while Gold fell 0.3% to $1,941.95 an ounce. Oil prices pulled back on risks to demand from China due to fresh Covid lockdowns. Consequently, Brent crude fell 2% to $100.71 per barrel. Market opinion continues to be determined by a hawkish Fed, commodity supply disruptions caused by the war in Ukraine and the likelihood of a deceleration in economic growth. Meanwhile, Chicago Fed President Charles Evans is due to speak later today, while Fed Governor Lael Brainard, Richmond Fed President Thomas Barkin are due to speak tomorrow. On the data front, U.S. CPI is expected tomorrow while U.S. retail sales, initial jobless claims and University of Michigan consumer sentiment come out on Thursday.

The World Bank has issued a forecast of an 11.2% fall in Russia’s GDP in 2022, as consequence of the sanctions imposed on Russia by the West. The Minister of Finance, Anton Sultanov, said that Russia will sue the West if it has to default on Russian sovereign Eurobonds. He noted that Russia made every possible effort to pay in currency but will have to pay in roubles now. Meanwhile, Central Bank of Russia has cut the key rate from 20% to 17% and has eased capital controls. 12% commission on the purchase of currency on MICEX is no longer charged. After hitting a level of 71, rouble has weakened again and is trading now at around 79.25.  IMOEX lost 1.62% and closed at 2592.72 on Friday. Sovereign bonds are mostly flat with Russia 28 trading around 23 and Russia 47 at 19. Corporate bonds are mixed with PGILLN 3 ¼ 10/14/2028 falling from 30 to 26 and GTLKOA 4.349 02/27/2029 slightly up from 18 to 19.  The Chancellor of Austria, Karl Nehammer, is scheduled to meet Putin in Moscow today after meeting Ukrainian president, Volodymir Zelensky in Kyiv yesterday. He will attempt to build a dialogue with Russian president as the war in Ukraine continues. In other news, Societe Generale SA agreed to sell its Rosbank PJSC unit to Vladimir’s Potanin Interros Capital.

Bunds open weaker retracing the trend from Friday. The 10Y touched a high of 0.773% before dropping 0.772%. Yields continued the upward trajectory over concerns related to inflationary risks and hawkish central Banks. Peripherals mirrored the move on bunds with a relatively weak open; 10Y BTPs yields went as high as 2.34% before retreating to 2.33%, 1 basis point firmer. Stocks opened lower; the Stoxx 600, opened lower at 457.43 compared to previous sessions closing of 460.97. Meanwhile, EU foreign ministers meet later today, and more Russia measures will be on the agenda. Also expected this week is the ECB rate decision slated for Thursday.

Bunds open weaker retracing the trend from Friday. The 10Y touched a high of 0.773% before dropping 0.772%. Yields continued the upward trajectory over concerns related to inflationary risks and hawkish central Banks. Peripherals mirrored the move on bunds with a relatively weak open; 10Y BTPs yields went as high as 2.34% before retreating to 2.33%, 1 basis point firmer. Stocks opened lower; the Stoxx 600, opened lower at 457.43 compared to previous sessions closing of 460.97. Meanwhile, EU foreign ministers meet later today, and more Russia measures will be on the agenda. Also expected this week is the ECB rate decision slated for Thursday.