US stocks stumbled, and Bonds yields rose amid elevated unpredictability regarding whether the Fed would be able to put together a soft economic landing after stepping up its monetary policy tightening drive last week. Consequently, the S & P 500 lost 0.57%% to close at 4,123.34, Nasdaq 100 declined by 1.40% to 12,144.66 while DOW dropped 0.30% to close at 32,899.37. Brent crude fell 1% to $111.25 per barrel over concerns on slowing demand in Asia which outweighed a G7 commitment to ban Russian oil. Renewed selloffs in Treasuries sent the 10-year UST to 3.17%, 5bps higher while Gold regarded as a haven asset fell 0.8% to $1,869.11 an ounce. New York Fed President John Williams and Fed Governor Christopher Waller are expected to speak tomorrow. On the data front, U.S. CPI is due on Wednesday.

In his annual Victory Day address, President Vladimir Putin called the conflict in Ukraine inevitable and repeated claims that it was a response to preparations of an attack on Crimea and areas controlled by Russian separatist in Eastern Ukraine. He said Russian troops in Ukraine were fighting to avoid a global conflict, such as World War 2.  He did not announce a full troop mobilization during his speech, as was rumoured last week. In the meantime, this morning, Russian troops pushed forward to capture the crucial Ukrainian port city of Mariupol and now closest to victory. Marking Victory Day for Ukraine, Ukraine’s president Zelensky said that despite the difficulties, his country would emerge victorious in the war. Last week the overall sentiment on the markets was predominantly negative.  Russian stock market ended Friday’s session in the red with MOEX down 0.49% on the day at 2,393.03. The banking sector was the worst performer with Sberbank down 1.36% and TCS Group losing as much as 6.07%. Although some analysts expect further easing of currency controls from CBR, Russian ruble had the weakest session in the last two months and lost 2.4% against the USD closing session at 69.40. The US has further tightened sanctions on Russia by blacklisting a few financial executives and restricting provision of financial services to Gazprom bank. These were not full sanctions, but more of a signal that Gazprom bank is not a haven. Meanwhile, the UK has imposed higher duties on certain goods from Russia and Belarus, including platinum, palladium, and some chemicals with a total amount of $1.7 billion. The world largest metals producer Norlisk Nikel had a muted reaction with GMKNRM 22 down around 1% to mid-60s. Russia 28 and Russia 47 were mostly flat in low and mid 20s respectively. Russian markets are closed for a holiday today and will reopen tomorrow.

Bunds open weaker following the trend from Friday. The 10Y touched a high of 1.163% before dropping to 1.135%, 2bps down day-on-day. Peripherals mirrored the move on bunds with a relatively weak open; 10Y BTPs yields went as high as 3.12% before retreating to 3.10%, 2 basis points firmer intraday. Stocks opened lower amid worries over direction of economic growth coupled with rising inflation, monetary tightening, and weakening of China’s export growth due to worsening Covid outbreaks. Consequently, the Stoxx 600, opened lower at 425.53 compared to previous sessions closing of 429.91.

SSA kicks off the week lower as rates continue their uptick with 10Y UST touching 3.15% in early trading. NGERIA (-0.625) continues to bear the brunt of selling pressure while KENINT (-0.75) leads the slide as the government presses on with Eurobond issuance plans. REPCAM (-0.50) also heavy with external debt servicing expenditure almost doubling in Q1.

Activity in the Nigerian local Secondary Market for Bonds was mixed as Money Market liquidity remained steady at N570bn.We saw demand on the short to mid end of the curve as traders’ cherry picked some maturities while the long end remained stable. Intraday, average yields were down by 1bp across the curve. Consequently, FGN 26s closed at an offer rate of 10.42%, down 3pbs from previous day’s level of 10.45% while 50s closed at an offer rate 12.87%, same as previous days level. Secondary Market for Treasury bills was moderately active with lingering strong system liquidity. Banks continued to utilize excess liquidity in their cash balances to prevent CRR Debits by the CBN. Day-on-day, average discount rates were slightly changed across the curve. Consequently, discount rate on 8th Aug 2022 SPEB closed at 3.10% from a previous level of 3.15% while the new 1-year NTB was stable at 4.00%.  The exchange rate between the naira and the US dollar closed at N416.82/$1 at NAFEX compared to previous sessions level of N417.78/$1, an appreciation of circa 0.23%.