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Morning Note: Investors Watch as Bankers move to Save the Global Economy.

Global markets are looking at a reprieve today as Wall Street eked out gains yesterday for the first time in two weeks. Early Friday data shows that Asian bond markets rallied and oil boasted its biggest bounce on record, though a panicked rush into U.S. dollars suggested the crisis was far from done.The dollar’s surge is a nightmare for the many countries and companies that have borrowed heavily in the dollar, leading to yet more selling of emerging market currencies in a negative feedback loop.

The Nairobi Securities Exchange opens the day with a little bit of optimism to follow on global markets. Furthermore, the results released yesterday could bring into play a defensive game for bank stocks, just as local investors did on Safaricom earlier in the week. Equity Bank will definitely be a counter to look onto as the firms announced an increase in dividend and also an increase in net earnings by 14%. Most listed firms have been forced to push the Annual General Meetings. This is due to the Corona Virus which caused the government to issue directives of gatherings. Eveready has so far issued a notice for their AGM date extension.

Market activity may be low as we have also learnt that some Fund Managers have opted to work remotely,this implying that communication break may occur and therefore affecting the order flow. Nevertheless, the NSE has assured market participants that normal trading will continue, and as long as an order is placed on the market, it will execute when it finds a match.

As the spread of the corona virus brought much of the world to a halt, nations have poured ever-more-massive amounts of stimulus into their economies while central banks have showered markets with cheap dollars to ease funding strains.

MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.6%, while Australia’s beleaguered market rose 2.9%. Japan’s Nikkei went the other way and dipped 1%. Gains in tech stocks had helped the Dow rise 0.95% on Thursday, while the S&P 500 gained 0.47% and the Nasdaq 2.3%. However, E-Mini futures for the S&P 500 slipped 1.7% in early Asian trade on Friday, a pattern of weakness seen every day this week.

Aiding sentiment was a 25% rally in oil prices overnight. U.S. crude added another 53 cents to $26.44 a barrel on Friday, up from a low of $20.09, while Brent crude stood at $28.46. This was a major relief as the collapse of crude prices had blown a huge hole in the budgets of many oil producers and forced them to dump any liquid asset to raise cash, with U.S. Treasuries a particular casualty.

The euro was down near three-year lows at $1.0660, having shed 4% for the week so far – the steepest decline since mid-2010. The dollar was also up 3.2% for the week at 111.33 yen , the largest gain in more than three years. Sterling sank to its lowest since 1985 after the Bank of England surprised by cutting rates to 0.1%. The pound was last at $1.1484 and down a staggering 6.5% for the week. The jump in the dollar has made gold more expensive in other currencies and pushed its price down 3.7% for the week to $1,471.39 per ounce.

Here’s a wrap of what’s moved markets while you were asleep.

Stocks

  • Futures on the S&P 500 Index fell 0.1% as of 12:21 p.m. in Hong Kong. The index rose 0.5% on Thursday.
  • Hong Kong’s Hang Seng Index added 2.8%.
  • The Shanghai Composite rose 0.5%.
  • South Korea’s Kospi rose 4.3%.
  • Euro Stoxx 50 futures climbed 0.3%.

Currencies

  • The yen rose 0.5% to 110.17 per dollar.
  • The offshore yuan traded at 7.1080 per dollar, up 0.7%.
  • The euro advanced 0.4% to $1.0736.
  • The Aussie gained 2% to 58.55 U.S. cents.

Bonds

  • The yield on 10-year Treasuries slid about six basis points to 1.14% Thursday. Futures rose 0.3% on Friday.
  • Australian 10-year yields slumped 24 basis points to 1.25% after soaring Thursday.

Commodities

  • West Texas Intermediate crude rose 4.4% to $26.33 a barrel.
  • Gold was at $1,484.26 an ounce, up 0.9%.