US equity futures and oil prices declined as China’s stimulus package failed to alleviate investor concerns about risks to economic recovery amid hawkish campaigns by central banks. Although US stock prices closed positive yesterday with S & P 500 up 1.86% to 3,973.75, DOW at 31,880.24, up 1.98% and NASDAQ 100 up by 1.59% to 11,535.27, futures which show likely opening levels for equities are currently south bound with the S&P Futures down 1.35% to 3,918.00, DOW Futures down 0.93% to 31,542.00 and NASDAQ Futures at 11,784.00, down 2.09%. Brent crude fell 1.2% to $112.11 per barrel Oil amid China covid lockdowns, not-up-to par economic boost plans and ongoing war in Ukraine. Meanwhile, the yield on 10-year USTs declined 3bps to 2.82% while Gold rose by 0.1% to $1,855.51 an ounce. Markets may remain choppy as investors gauge the monetary policy outlook, inflationary pressures, and the effect of China’s covid lockdowns on the world economy. Also, the FOMC Minutes of the last Fed rate -setting meeting which comes up on Wednesday will provide markets insights into the direction of interest rates going forward.

It has been three months since Russia invaded Ukraine and in a keynote speech via a video link, Ukraine’s President Volodymyr Zelenskiy reinforced his call for embargoes on oil, technology, and other trades with Russia. At the same time, Russia’s Security Council Secretary, Nikolai Patrushev commented, that Russia is not chasing any deadlines and will meet all the targets in its “special military operation” in Ukraine. Russia’s equity market has slipped for the fourth day, as oil prices declined, and European natural gas prices continued fluctuating. IMOEX dropped by 1.63% this morning and is trading at around 2,264 level. Lukoil, Gazprom and Sberbank have been leading the losses. Russia’s ruble has shrugged off capital control and has continued its climb for the fifth consecutive day. The recent rally has brought the Russian currency to its strongest level against the US Dollar in the last four years. Ruble has also gained against the Euro and was up as much as 6% on Monday. USDRUB is currently at 57.50 level and EURRUB at 59.47. Russian sovereign bonds were slightly up this morning with Russia 28 up in mid – higher 20s and Russia 47 flat in high teens. US Treasury is expected to tighten sanctions on Russia this week, threatening around $1 billion owed to bondholders. Treasury Secretary Janet Yellen said last week that she is unlikely to extend an exemption expiring on Wednesday that allows Russia to pay on its foreign currency bonds to US investors.

Bunds open slightly stronger. The 10Y touched a high of 1.028% before dropping to 1.002%, 3bps down day-on-day. Peripherals mirrored the move on bunds with a relatively strong open; 10Y BTPs yields went as high as 3.00% before retreating to 2.96%, 4 basis points firmer intraday. Stocks opened lower as China’s economic support plan failed to impress investors, stoking concerns about risks to recovery amid central banks’ hawkish policies. Consequently, the Stoxx 600, opened lower at 430.82 compared to previous session’s closing of 436.54.

A largely firm start to the space following a continuation of the relief rally on Monday. Steepened trends largely observed as bids on short tenors resumed. NGERIA (+0.25pts) up following a recovery of over 2pts on Monday with demand returning to the 28s and 29s in particular, having borne the brunt of last week’s selling; demand remains at the open even as Q1 GDP slowed to 3.11% from Q4 2021’s 3.98%. GABON reversed earlier losses to close flat as risk started to clear; it opens flat.

Activity in the Nigerian local Secondary Market for Bonds was mixed. We saw demand trickle across the short to mid end of the curve while the long end remained relatively stable. Intraday, average yields were down 3bps across the curve. Consequently, FGN 29s closed at an offer rate of 11.00%, down 10pbs from previous session’s level of 11.10% while 50s closed flat at 12.90% on the offer. Meanwhile, MPC is expected to meet on 23rd and 24th of May 2022.Secondary Market for Treasury bills had mixed sentiments. We saw pockets of demand here and there across the curve combined with some bearish sentiments.  Day-on-day, average discount rates were mostly unchanged across the curve. Consequently, discount rates on 11th July 2022 SPEB closed at 3.20% same as last session’s closing while 7TH Feb 2023 OMO closed at 4.75% compared to last session’s closing of 4.55%.  The exchange rate between the naira and the US dollar remained stable at N417.46/$1 at NAFEX.