U.S. midterm election results on focus

U.S. markets finished Tuesday session higher with investors eye on midterm results. Republicans close to taking control of the House of Representatives. However, the Senate race looks too close to call at this point with many of the most competitive races still undecided.

The S&P 500 is up about 7% from its October closing low, but it remains down about 20% in 2022 due to worries that the Fed’s aggressive rate hikes could cripple the U.S. economy.

The S&P 500 climbed 0.56% to end the session at 3,828.13 points. The Nasdaq gained 0.49% to 10,616.20 points, while the Dow Jones Industrial Average rose 1.02% to 33,160.83 points.

The U.S. dollar index DXY which tracks the greenback against a basket of six other main currencies, traded 0.1% higher at 109.625, after losing around 1% so far this week.

Speaking to a global summit in Egypt Ukrainian President Zelenskiy stated that he was open to negotiations with Russia if they are focused on safeguarding Ukraine’s territorial integrity, compensating Kyiv and bringing to justice perpetrators of war crimes. Zelenskiy’s statement came after the US has urged Kiev to publicly signal that is open to talks with Russia. In the meantime, Ukrainian military launched its first big counterattack since the start of Russia’s invasion in Ukraine. Russia’s equity market slipped this Wednesday morning, as oil held losses amid concerns over Chinese demand.  IMOEX lost 0.89% to 2,187 and RTSI lost 1.29% to 1,128. Russia’s biggest lender Sberbank, as well as energy companies Novatek and Lukoil were the main contributors to the slide, alongside internet company Yandex. Shares in precious metals producers, however, defied the negative trend supported by  higher gold prices. Shares of precious metal companies Polyus and Polymetal International rose about 4% after gold traded above $1,700 an ounce at a one-month high. Russian rouble was slightly lower this morning losing 0.02% against US Dollar to 61.02 and 0.27% against the Euro to 61.22. If Brent rises to $100 a barrel, some analysts predict USDRUB to break the psychological level of 60. Russian bond yields were higher today with 10-year benchmark bond yields trading above 10% at 10.09%. Russian Finance Ministry will offer OFZ bonds with Maturity in November 2030 on its weekly auction. In economic data, Russia is expected to report price gains eased in October with CPI expected to come out at 12.8%, prior 13.68%.

EU stock markets opened lower Wednesday as mining stocks fell after hopes of an easing in China’s strict COVID-19 measures were quashed over the weekend. The DAX index in Germany traded 0.62% lower at 13,604 level, CAC 40 in France fell 0.34% to 6,419 points while the FTSE 100 in the U.K. dropped 0.41% to 7,278 level. The benchmark STOXX 600 index slid 0.57% to 419.1, following four straight weeks of gains. European investors are awaiting the results from the U.S. midterm elections, with Democrat President Joe Biden’s legislative agenda under threat.

SSA opens firmer as rates rally and the dollar is steady having weakened since last week. KENINT (+3.125) the clear outperformer on Tuesday as demand remained amid some short covering. NGERIA (+.375) also surged towards the close having traded weaker for most of the session.

The local FI market continued on a quiet trajectory. The bonds market saw little activity and once again, closed flat across the curve. There was little activity in the Treasury Bills market. Yields closed lower by 1bps across the curve.