Tue, May 30, 2023 @ 12:00 GMT
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US Equity Markets Was Range Bound Yesterday

Market movers today

With another quiet day on the economic data front, the market will focus on geopolitical developments around Russia and Turkey, where the US has adopted new sanctions.

On the data front, the main interest is on the US PPI headline and core numbers for July, which are assumed to remain modest at the same levels as in the previous month. The core PPI rate will then be running at 2.8% y/y. The rate has been increasing as the cost of services has been rising. The initial jobless claims will also be released.

Financial markets will also be watching the Russian reaction to yesterday’s US sanctions, which were imposed due to the possible Russian involvement in the nerve gas attack on two Russians in the UK in March this year. Also yesterday, the Russian media leaked a proposal by US Congress for a new round of US sannctions against Russia in relation to claims of Russian interference with the 2016 elections.

In relation to Turkey, the meeting between the Turkish delegation and US government officials in Washington will be followed very closely given the possible impact on Turkish financial markets.

Selected market news

The 10Y US Treasury auction saw good demand despite the US Treasury department selling a record amount of 10Y bonds at the auction. The bid-to-cover was 2.5 and 10Y yields ended Wednesday 1bp lower. The 30Y government bond auction in Japan this morning drew decent investor interest. The bid-to-cover was bit a lower relative to the last 30Y auction in July, but higher than the average seen this year in the 30Y auctions.

The US equity markets was range bound yesterday. The S&P is still trading close to the highs since in January.

The Russian ruble is under pressure as the US plans more sanctions. The new sanctions come after the US determined that Russia was behind a nerve gas attack on a former Russian spy in the UK. See more in the FX section.

It is again a mixed picture for the Asian equity markets this morning. China is preparing to retaliate against the rise in US tariffs, and has announced that it will impose tariffs of 25% on USD16bn of US goods imported by China.

Danske Bank
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