Global selloff deepens as stocks, bonds, U.S stock futures slump
The global exodus from stocks and bonds is intensifying as investors grow increasingly concerned that inflation will force central banks to squash economic growth with higher interest rates. Subsequently stocks finished sharply lower on Friday as S&P 500 declined 2.9% to finish at 3,900.86, Nasdaq 100 declined 3.5% to finish at 11,340.02, while Dow Jones declined 2.7% to 31,392.79. Meanwhile U.S stock- index Futures sank on Sunday with S&P 500 Futures declining -2.0%, Nasdaq 100 Futures ,-2.40% and Dow Jones Futures declining 1%. The 10-year yield Treasury is at 3.23%, while gold increased 1.5% to $1,875.50. Meanwhile WTI crude oil moved $0.84 lower to $120.67 per barrel.
Russian troops have focused shelling on the north of Luhansk region and at least 22 people were injured in Russian missile attacks in the western Ukraine. At the same time, Serbian president, Vucic, pushed against German chancellor, Sholz, in a press conference on Friday, saying that Serbia has a different position on sanctions against Russia and is not going to support them. Last Friday Russian Central Bank cut interest rates from 11% to 9.5%, the level of interest rates, that Russia had before the start of the invasion to Ukraine, as inflation has slowed more than expected. The annual inflation rate in Russia was 17.1 percent in May down from 17.8 percent the previous month, but the head of Russian Central Bank, Elvira Nabiulina warned during a press conference on Friday, that inflation remained a major risk to the Russia’s economy. The ruble has extended its rally post interest rate announcement and surged as much as 5.5% on Friday. USDRUB closed at 56.80 and EURRUB at 60.10. Russia’s stocks market extended its weekly losses on Friday with IMOEX closing 0.37% lower at 2285. Polyus, Novatek and Norilsk Nikel were the worst performers. Russian sovereign bonds remained mostly unchanged with Russia 28 offered in mid 30s and Russia 47 in mid 20s. Russian markets are closed today for a public holiday.
SSA opens markedly weaker following the US CPI overshoot on Friday. ANGOL (-1.875pts) led the slide with NGERIA (-1.50pts) in close pursuit as bonds sold off further later in the session; both continue in similar vein at the open. KENINT whipsawed during the session, paring losses following the early slide before succumbing to the EM-wide selling pressures to close a point lower. GHANA holding steady at the open following reports that a deal to secure a $1 billion would be presented to Parliament for approval this week.