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Monday, 18 January 2021

What the markets are doing on 18 January 2021

EM currencies under pressure as greenback enjoys Biden bounce: Emerging-market currencies are coming under pressure as incoming US president Joe Biden’s pledge to pass USD 1.9 tn in fresh stimulus sends the USD on a two-week tear, Bloomberg says. EM currencies, in turn, logged losses after having ended 2020 with the biggest quarterly rally in a decade. “If vaccines prove less effective than we expect and [the] global economy stumbles, the ‘safe haven’ dollar would likely [continue to] appreciate,” Goldman Sachs strategists including Zach Pandl wrote in a report. There are, still, “broad dollar weakness” this year amid a higher exposure to risky assets and an expected rally in commodity prices, the strategists said.

Global money managers are poised to snap up US bonds as the prospect of a unified Democratic government points to higher inflation and yields, though a rush of buyers might limit how high yields can go, Bloomberg reports. Analysts say investors in Japan — the biggest foreign owner of American debt — are biding their time to wait for 10-year Treasury yields to peak before buying, though some observers are still concerned rising unemployment and declining retail spending will limit the US’ economic rebound.

Down

EGX30

11,446

-0.1% (YTD: +5.5%)

None

USD (CBE)

Buy 15.62

Sell 15.72

Up

USD at CIB

Buy 15.63

Sell 15.73

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

8,874

-0.3% (YTD: +2.1%)

Up

ADX

5,280

+0.3% (YTD: +4.7%)

Down

DFM

2,695

-0.3% (YTD: +8.2%)

Down

S&P 500

3,768

-0.7% (YTD: +0.3%)

Down

FTSE 100

6,735

-1.0% (YTD: +4.3%)

Down

Brent crude

USD 54.93

-0.3%

Down

Natural gas (Nymex)

USD 2.65

-3.3%

Down

Gold

USD 1,828

-0.1%

Down

BTC

USD 36,183

-0.1%

The EGX30 fell 0.1% yesterday on turnover of EGP 1.4 bn (4.4% above the 90-day average). Regional investors were net sellers. The index is up +5.5% YTD.

In the green: Ibnsina Pharma (+4.6%), Egypt Kuwait Holding (+3.3%) and Dice (+2%).

In the red: Egyptian Iron & Steel (-9.9%), Cleopatra Hospitals (-2.1%) and Ezz Steel (-2%).

It’s a mixed bag in Asia this morning, with Chinese equities in the green and most of everyone else seeing red. Markets in Europe and the US are forecast to resume last week’s sell-off when they open later today.

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