US treasuries experienced one of their biggest daily sell-offs in the past decade yesterday after Federal Reserve Chairman Jay Powell indicated that the central bank could hike interest rates more aggressively than expected, according to Bloomberg. Following last week’s policy meeting, the market had already priced in a further six 25-bps rate hikes this year. But in comments at a conference yesterday, Powell suggested that the central bank could resort to larger rate hikes to tame soaring inflation, which is expected to accelerate further in the coming months due to surging commodity prices caused by the war in Ukraine.

This drove yields across much of the curve to their highest levels in three years, and narrowed the spread between 5- and 30-year bonds to its slightest since 2007, a sign that the market is beginning to price in a recession.

Stocks weren’t as hard hit, with the S&P 500 closing marginally in the red, the Nasdaq falling 0.4% and the Dow down 0.6%.

And oil continued to climb: Brent crude is once again nearing the USD 120 a barrel handle after climbing almost 8% yesterday as peace talks between Russia and Ukraine showed no signs of progressing.

THE CLOSING BELL-

The EGX30 rose 4.9% yesterday on turnover of EGP 2.2 bn (57.6% above the 90-day average). Local investors were net buyers. The index is down 3.7% YTD.

In the green: Alexandria Mineral Oils (+13.8%), TMG Holding (+11.8%) and Madinet Nasr Housing and Development (+10.1%).

In the red: Egyptian Kuwaiti Holding (-3.9%), and Fawry (-2.5%).