US stock futures increased; treasury yields advanced

US equity futures pointed higher on Monday and Treasuries retreated amid steadier investor sentiment compared with last week’s rout in global shares. Treasury futures also slid, with no cash trading due to the Juneteenth holiday. Subsequently the S&P 500 futures rose 1.6% after the worst week for the underlying gauge since the start of the pandemic, while Nasdaq 100 futures rose 1.6. However, the 10- year yield Treasury increased 5 basis point to 3.28%.

Ministry of Finance Anton Siluanov reported that the average price of Urals oil in May 2022 increased by 18% year-on-year and amounted to $78.81 per barrel. He is noted that the Urals will reach $80.1 per barrel at the end of 2022, then it will start to decline and reach $61 per barrel in 2025, according to draft forecasts of the Russian budget, tax, and customs tariff policy for 2023-2025, prepared by the Ministry of Finance. Meanwhile US Treasury Secretary Janet Yellen said the US is in talks with allies around the world about curbing Russian energy revenues by imposing a price cap on Russian oil. IMOEX rose at 2.08% to 2402.15 points, the first time it has risen above 2400 points since the end of May. The RTSI rose at 3.08% to 1356.85 with Sberbank, Novatek and Lukoil being the best performers. Meanwhile, SPB Exchange and major brokers are discussing the possibility of creating a new exchange in Kazakhstan, where foreign assets of Russian investors could move. Russian sovereign bonds remained relatively stable with Russia 28 offered in mid 30s and Russia 47 in low 20s. Russian rouble continued to strengthen with USDRUB renewing a two-week low of 55.80.

Bunds open slightly stronger retracing the trend from yesterday. The 10Y touched a high of 1.75% before dropping to 1.74%, 1bp down day-on-day. Peripherals mirrored the move on bunds with a relatively strong open;10Y BTPs yields went as high as 3.62% before retreating to 3.60%, 2 basis points firmer intraday. Stocks open higher as investors examined cheaper valuations against the effect of rising inflation and Hawkish central banks on economic growth. Consequently, the Stoxx 600, opened higher at 411.44 compared to previous session’s closing of 407.14.

Activity in the Nigerian local Secondary Market for Bonds was relatively calm ahead of release of Bonds auction results conducted yesterday. We saw improved offers across board amid a relatively weak system liquidity. Intraday, average yields were slightly up across the curve. Consequently, FGN 28s closed at an offer rate of 10.82%, 2 basis points up from previous level of 10.80% while 50s closed at an offer rate of 13.09% up 5 basis points from 13.04%. Finally, Bonds auction stop rates for the FGN 25s, 32s & 42s closed at 10.10%, 12.50% and 13.15% respectively. Activity in the Secondary Market for Treasury bills was mostly quiet in the midst of a feeble system liquidity. We witnessed mixed sentiments across the curve. Day-on-day, average discount rates were mostly unchanged across board. Consequently, discount rates on 29th of August 2022 SPEB and 27th of October 2023 NTB were at 4.95% and 4.65% respectively. The exchange rate between the naira and the US dollar closed at N418.83/$1 at NAFEX compared to previous session’s level of N418.90/$1, an appreciation of circa 0.02%.

A mixed open to the space after Monday’s sluggish open. ZAMBIN opens flat having gained 0.25pts yesterday amid initial progress in restructuring talks. RWANDA (+0.125pts) opens firmer even as tensions rise with neighbouring DRC over armed skirmishes near the border regions of both countries.