U.S. equities finished with gains while treasury yield declined
U.S. stocks finished higher on Wednesday after losses from previous day. Also, August data showed that costs for wholesale goods and services fell for the second month in a row. The inflation data has solidified expectations that the Fed Reserve will remain aggressive with next week’s September interest rate decision. Subsequently, Dow Jones increased 0.2% to finish at 31,135.09, S&P 500 increased 0.3% to finish at 3,946.01 while Nasdaq 100 increased 0.7% to finish at 11,719.68. The 10-year yield declined 1.1% basis point to 3.411%. Gold spot price declined $1,715.20 per ounce and WTI crude oil gained $1.70 to $89.01 per barrel.
The criticism in Russia of the sudden retreat in the northeast Kharkiv region over the last week has spread from Internet bloggers to mainstream politicians. Communist Party leader Zyuganov called for a complete mobilization of the country. However, Russian forces are still holding key positions in Ukraine’s Donbas region and continue intense fighting against Ukraine near Kherson in the south. In the meantime, Putin’s expanding war efforts appear to be lifting Russian industrial production, helping Russian economy outperform the worst forecasts amid sanctions. Production of “finished metal goods”, a statistical line that includes weapons, surged 30% in July from a year earlier. Russian stock market edged higher this Thursday morning as investors weighed elevated prices of oil and gas against the economic impact of sanctions and military developments on the battlefield in Ukraine. Both IMOEX and RTSI traded higher with IMOEX gaining 0.12% to 2,439 and RTSI gaining 0.48% to 1,289. Energy company Surgutneftegaz and online recruitment service Headhunter gained, while Sberbank and steelmaker Several retreated. Rosneft shares jumped as much as 1.7% on their report showing a jump in profit, which may allow the company to pay an interim dividend. Russian ruble gained for the sixth session both against US Dollar and Euro with USDRUB down 0.25% to 59.63 and EURRUB down 0.45% to 59.51. Russian government bonds yields declined as the Finance Ministry resumed auctions after a long break with 10-year benchmark ruble bond yields down 2 bps to 8.42%. The prolonged absence of government debt supply and expectations of the Central bank rate cut on Friday contributed to the high demand for OFZ.
SSA opens tilted towards the upside seemingly intent on reversing the selloff that followed the latest US CPI data. GHANA (-.375) the weakest in the space at the open. Inflation continued higher in August coming 33.9% YoY from July’s 31.7%; the figure came shy of the expected 35.1% though.