U.S. equities drop, bonds yields rise on hawkish Fed and recession risks

U.S. stocks declined on Tuesday making it three-day losing streak. Market strategists blamed this on several factors, including nerves ahead of the Fed Reserve chairman Jerome Powell’s speech on Friday, combined with anxieties of rising Treasury yields and a stronger U.S. dollar. Subsequently, Dow Jones declined 0.5% to finish at 32,909.30, S&P 500 declined 0.2% to finish at 4,128.73 while Nasdaq 100 declined 0.002% to 12,382. The 10-year yield Treasury rose 2 basis points to 3.053%. Gold futures for December moved by $12.80 to $1,761.20 per ounce while WTI crude oil increased 3.7% to $93.68 per barrel.

Bunds open weaker following trend from yesterday. The 10Y touched a high of 1.38% before dropping to 1.36%, 2bps down day-on-day. Peripherals mirrored the move on bunds with a relatively weak open;10Y BTPs yields went as high as 3.72% before retreating to 3.69%, 3 basis points firmer intraday. Stocks dwindled on concerns over an imminent economic recession coupled with Fed’s unrelenting hawkish campaign to tame inflationary pressures. Consequently, the Stoxx 600, opened lower at 429.35 compared to previous session’s closing of 431.35.

SSA opens firmer with an uptick in Brent prices particularly pushing oilers. The space shook off early weakness to close mostly firmer with ANGOL and NGERIA leading the rebound. ANGOL (+3.00) steepened as the front end remained bid throughout the session while NGERIA (+2.50) had long end seeing most of the demand; ANGOL (+.25) opens in strength on elections day. GHANA (-.50) struggled to shake off weakness however and continues in the same vein of weakness at the open.

SSA opens firmer with an uptick in Brent prices particularly pushing oilers. The space shook off early weakness to close mostly firmer with ANGOL and NGERIA leading the rebound. ANGOL (+3.00) steepened as the front end remained bid throughout the session while NGERIA (+2.50) had long end seeing most of the demand; ANGOL (+.25) opens in strength on elections day. GHANA (-.50) struggled to shake off weakness however and continues in the same vein of weakness at the open.