NYSE stock futures posted modest gains after U.S. inflation data will limit investor expectations for more interest rate hikes from the Fed. Micron Technology Inc. became the latest chipmaker to warn of slowing demand. Nasdaq 100 futures also rose despite CEO Elon Musk's massive selloff of Tesla Inc. shares. The EuroStoxx 600 recovered from early losses.
The two-year Treasury yield is 10 basis points higher than the 33-year rate, the deepest inversion since 2000, interpreted as a sign of an impending recession following the Fed's accelerated monetary tightening campaign to curb inflation. U.S. consumer price inflation cooled, though it remained elevated, in July, while the core reading fell slightly. The report will limit expectations about Fed tightening in September.
A lower-than-expected inflation reading is a tailwind for markets, taking pressure off the dollar and stocks. The dollar (USD) is falling as oil survives at $90 a barrel, as a major pipeline from Russia to Central Europe appeared ready to resume flows in the coming days, and industry estimates showed an increase in U.S. inventories.
In Colombia: August 10-12: ANDI Congress in Cartagena; includes participation by President Petro, Minister of Finance Ocampo, Ecopetrol CEO Felipe Bayón, and Bancolombia CEO Juan Carlos Mora * Auctions: COP650,000 billion in Treasury bonds maturing in 2031, 2042, and 2050 * This week: August 12: BanRep surveys retail sales, manufacturing production, and industrial production.
International: 7:30am: US July CPI, m/m est. 0.2%, prev 1.3%; y/y est. 8.7%, prev 9.1% * 9:30am: US crude oil inventories Aug. 5; est. -1m brls, prev 4.5m brls * Fed Agenda: 10am: Evans (Chicago) speaks on the economy and monetary policy * 1pm: Kashkari (Minneapolis) speaks on inflation * This week: August 11: Mexico, Peru rate decisions.
Russian pipeline operator Transneft announced that it plans to resume oil pumping through the southern branch of the Druzhba pipeline at 16:00 p.m. Moscow time (1300 GMT). In this sense, yesterday's gains have been reversed and fears of supply shortages in Europe have weakened, so that prices have fallen back below USD $90.
US: Treasury bonds are gaining strength after inflation data fell short of market expectations. Inflation in July, which appeared to be easing, triggered a very positive market reaction, averaging gains of 8 bp. Ten-year Treasuries gained 10 bp, and the curve inversion briefly reached new highs of -14 bp. Now, the shorter end of the curve is leading the gains, with two-year Treasuries appreciating 58 bp, slightly reversing the inversion that hovered around -2 bp. Auctions continue today with the sale of 18-year bonds.
Although they maintain positive results following the US inflation data, in the case of Bunds, German inflation anchored to market expectations discourages investors from betting on changes in bond rates.
Emerging Markets: Yesterday's performance was negative, with a 12 bp yield loss on average for Brazilian and Mexican bonds across the entire curve. On the other hand, Peruvian bonds depreciated at the short and long ends, while the mid-end showed gains of only approximately 1 bp. Considering the correlation between emerging market bonds and Treasuries, we expect fixed-income bonds to show gains today.
Colombia: The local market displayed mixed performance, with Treasury yields gaining value at the short end of the curve, while the mid- and long-term yields depreciated. Ten-year yields fell 10 bp, and node 7 saw the greatest fluctuation, with losses of 6 bp. Treasury yields appeared to be failing to consolidate a trend marked by devaluations in the first half of the day, which reversed by the end of trading. Following the US inflation data, we expect Colombian fixed-income yields to show gains today, led by shorter-maturity bonds. For today we expect a trading range of 8.8%-10.80% for TES 11.10, 24%-11.70% for TES 12.00, 27%-11.80% for TES 12.40, 31%-12.20% for TES 12.60 and 42%-12.20% for TES 12.50.
The dollar (DXY) is trading at 104.9 units this morning. Following the inflation data, the US currency fell around 1.2 units due to increased optimism and risk appetite in the market. Investors have therefore begun to include riskier assets in their portfolios, reducing the "flight to quality" flows that have
The Colombian peso (COP) closed at $4,350 pesos, depreciating 1.09% from the previous close. The dollar supply came from the derivatives market, while demand came from the real estate sector. It's important to note that the exchange rate wasn't consolidating any trend, but with the downward inflation rate in the United States, we expect it to seek new floors below the resistance of $4,280 and consolidate a short-term downward trend, due to the devaluation of the dollar and increased appetite.
The euro (EUR) is trading at $1.0234, with an associated strengthening of 0.4081%. The EUR/USD is advancing for the second consecutive session, extending the optimism seen at the beginning of the week, as the dollar continues to give back its gains following Tuesday's nonfarm payrolls. Against this backdrop, we expect a tight daily trading range between 1.028 and 1.016.
Asian markets are lower following China's inflation data and ahead of the US CPI data. Mainland markets fell, with the Shanghai Composite down 0.54% at 3,230.02 and the Shenzhen Component falling 0,87% to 12,223.51. Japan's Nikkei 225 fell 0.65% to 27,819.33, while the Topix index fell 0.17% to 1,933.65. MSCI's broadest index of Asia-Pacific shares outside Japan lost 1.24%. Australia's S&P/ASX 200 fell 0,53% to 6,992.7.
While healthcare stocks fell 0.5%. Earnings remain a key driver of individual stock price movement in Europe. Ahold Delhaize, ABN AMRO, E.On, TUI Group, Metro, Deliveroo, Prudential, and Aviva were among the major companies reporting before the bell on Wednesday. British insurer Aviva saw its shares rise more than 11% in afternoon trading after upbeat first-half earnings.
Yesterday, pursuant to the inter-administrative contract signed between the District Treasury Department and the GEB (General Electricity and Energy Corporation) and as a result of the exploratory work carried out by advisors to determine the feasibility of selling 9.4% of the subscribed and paid-in shares of GEB owned by the Capital District of Bogotá, the District Treasury Department requested early termination of the contract from Grupo de Energía Bogotá. The GEB will proceed in accordance with the District Treasury Department's request.
The MSCI index closed the day in negative territory, falling 0.82% to 1,322.08 points. Trading volumes in shares totaled COP 52,230.33 million, with the most active shares being Ecopetrol at COP 14,621.75 million, Preferencial Bancolombia at COP 10,138.49 million, and Bancolombia at COP 5,666.22 million.
We are convinced that every investor should diversify their investments across a variety of asset classes, regardless of market environment or trend, and work closely with their financial advisor to ensure their portfolio is adequately diversified and that their financial plan supports their long-term goals, time horizon, and risk tolerance. However, diversification does not guarantee profit or protect against loss. The preceding information, as well as the individual companies and/or securities mentioned, should not be construed as investment advice, a recommendation to buy or sell, or an indication of an intention to trade on behalf of any Acciones & Valores SA product. The securities mentioned may or may not be part of Acciones & Valores SA funds. For a complete list of Acciones & Valores SA portfolio holdings, please refer to the most recent annual, semi-annual, or quarterly report on our website. This document is for informational purposes only. Acciones y Valores is not responsible for the interpretation of such information, given that it does not cover all the aspects that an investor might consider necessary or desirable to analyze their decision to participate in a transaction, given that it is presented in an abbreviated form. For complete and absolute accuracy, investors must consult all documents provided through the website. Likewise, investors must conduct their own financial and legal analysis before making any investment decision. The values and figures contained herein are obtained from market sources presumed to be reliable, such as Bloomberg, Reuters, and the Issuers. The ratings contained in this report should not be considered investment recommendations or substitutes for ratings issued by certified credit agencies such as Moody's or Standard & Poor's. These ratings are solely quantitative; they do not include qualitative factors and depend on the financial information available in the market at the time of preparation. The opinions, estimates, and projections in this report reflect the author's current judgment as of the date of the report, and it is clarified that the content of the information contained herein is subject to change without notice. The authors' compensation is not associated with the results of the report or the recommendations made. The presentation and any preliminary documents regarding the products mentioned herein do not constitute a binding public offer; therefore, both the presentation and any other documents are subject to supplement or correct.
Héctor Wilson Tovar García, Research Manager wtovar@accivalores.com
Geiber David Gamba Leguizamón Equity Analyst geiber.gamba@accivalores.com
Paola Andrea Lama Velasquez Fixed Income Analyst paola.lama@accivalores.com
Estiven Hurtado Cortés Utilities estiven.hurtado@accivalores.com
Sarah Garces Anzola Retail Sector Analyst Sarah Garces@accivalores.com
Juan Camilo Buendia Sector Holding juan.buendia@accivalores.com
Valentina Orozco Energy Sector valentina.orozco@accivalores.com
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