Today’s Trading Playbook
KEY THEMES
U.S. equities slipped yesterday, whereas U.S. Treasury yields went down just a day before a potential Federal rate hike. Investors decided to take some chips off the table, looking for safety, especially after retail giant Walmart earnings disappointed, combined with signs of a gas supply crisis in Europe.
On the other hand, Brent oil prices weakened in Tuesday’s trading after the Biden administration announced more drawdown from the national oil reserve to fight inflation. We note that the U.S. dollar index (DXY) was down Wednesday morning in Asia ahead of an expected U.S. interest rate hike from the U.S. Fed. Meanwhile, European index futures were pointing to a green opening of Wednesday.
Elsewhere, Fitch Ratings has affirmed Commercial International Bank – Egypt’s [COMI]) Long-Term Issuer Default Rating (IDR) at 'B+' with Stable Outlook, and Viability Rating (VR) at 'b+'. The main rating drivers included solid franchise, resilient asset quality, strong profitability, adequate capitalization, stable funding, and foreign-currency (FC) liquidity pressures. The report mentioned that the Stable Outlook reflects Fitch's view that pressures on the domestic banking operating environment are manageable, moderating risks to Egyptian banks' financial metrics. We believe the rating details further underpin the fact that COMI’s price, for now, does not match its outstanding fundamentals as well as its true growth potential.
Now, on to the top news and analysis for the day.