U.S. equities mixed ahead of august jobs report, bonds yields rise
U.S. stocks ended mixed on Thursday as it recovered from previous four-day slump. Bond yields rose while another pandemic lockdown in the southwestern Chinese metropolis of Chengdu added to concerns about economic growth as we await employment data later today. Subsequently, Dow Jones increased 0.5% to finish at 31,656.42, S&P 500 increased 0.3% to finish at 3,966.85 while Nasdaq 100 declined 0.3% to finish at 11,785.13. The 10-year yield climbed to 3.264% from 3.131%. Gold spot price declined $24.20 to $1,702.00 per ounce while WTI crude oil declined $2.17 to $87.338 per barrel.
Russia is set to resume gas supplies on Saturday at 20% of capacity with Europe getting a temporary relief from supply fears and European gas futures plunging as much as 9.5%. However, expectations are growing in Europe that the gas flows will be used continuously throughout the colder months to keep markets on edge and blackmail Europe because of its sanctions on Russia following the war in Ukraine. In the meantime, Russian invasion in Ukraine keeps showing signs of stalling with Russia struggling to gain new ground and seeing Ukrainian defense forces fight back in occupied areas. Tensions remain high in Zaporizhzhia nuclear power plant as IAEA inspectors arrive on site amid heavy shelling in the area. Russian equity market rose this Friday morning with IMOEX gaining 0.11% to 2,449. As oil prices advanced and investors digested the previous days’ news about Gazprom dividend and better-than-expected manufacturing data, Russian stock market is now set for its best week in fourth months. Ruble weakened against the dollar and the euro compared with the previous day with USDRUB up 0.1% to 60.41 and EURRUB up 0.4% to 60.29. Russia’s plan to buy $70 billion in yuan and other “friendly” currencies contributed to ruble weakness. 10-year benchmark ruble bonds yields lost 1 bps this Friday to 8.44%. Russian sovereign bonds have staged a comeback this summer as hedge funds have warmed up to trading Russian debt and investors outside of the grip of Western sanctions on Moscow keep buying these bonds. RUSSIA 12 ¾ 06/24/2028 REGS Corp is now offered in high 60s, while RUSSIA 5 ¼ 06/23/2047 REGS Corp in high 50s.
A positive open to wrap up what’s been a dour week for SSA. The space kicked off the month on a weaker note albeit on a relatively muted note compared to Wednesday. €-denominated papers were heavy with BENIN (-1.00), IVYCST (-1.375) and SENEGL (-1.25) leading the slide. GHANA (+0.875) outperformed in the space’s only positive showing with bids returning against limited supply.