U.S stocks declined in a choppy trade yesterday, after Fed Reserve chair Jerome Powell reiterated his commitment to combat inflation through higher interest rates and tighter financial conditions. He said, “The American economy is very strong and well positioned to handle tighter monetary policy.” Meanwhile President Joe Biden also called on a three-month temporary gas-tax holiday in the U.S. Subsequently the S&P 500 declined 0.1% to finish at 3,759.89, Nasdaq 100 declined 0.2% to finish at 11,069.30, while Dow Jones declined 0.2% to finish at 30,483.13. The 10-year yield Treasury declined 4 bps to 3.12%. Gold gained $3.90 to $1,842.70 per ounce, while WTI crude declined $5 to 104.52 per barrel. Meanwhile, US initial jobless claims is expected later today. Also, Fed chair Jerome Powell testifies before congress on inflation battle and state of the economy.

Bunds open stronger following the trend from yesterday. The 10Y touched a high of 1.66% before dropping to 1.50%, 16bps down day-on-day. Peripherals mirrored the move on bunds with a relatively strong open;10Y BTPs yields went as high as 3.50% before retreating to 3.40%, 10 basis points firmer intraday. However, stocks open lower over revived worries of an economic recession following Fed chair Jerome Powell’s comments. Consequently, the Stoxx 600, opened lower at 401.27 compared to previous session’s closing of 405.74. On the data front, PMI report for Eurozone and ECB economic bulletin are due today.

SSA opens weaker following another heavy session yesterday. The space closed lower on Wednesday with a late shift in sentiment failing to stem the slide. GHANA (-0.25pts) opens lower after shedding 0.875pts on Wednesday as it underperformed following missed growth expectations. Q1 growth slowed to 3.3% YoY from Q4 21’s 7.0% expansion with the government having set a 5.8% growth forecast in November.

Activity in the Nigerian local Secondary Market for Bonds was strong amid a weak system liquidity. However, fresh demand for maturities was sustained across board as traders continued to cover short positions. Intraday, average yields were down by 3 basis points across the curve. Consequently, FGN 28s closed at an offer rate of 10.77%, 3 basis points down from previous level of 10.80% while 50s closed at an offer rate of 12.92% down 6 basis points from 12.98%. Activity in the Secondary Market for Treasury bills continued its bearish trend as Money Market liquidity dried up further. We witnessed selloffs as Banks hustled to create liquidity to fund their positions. Day-on-day, average discount rates were mostly up across board. Consequently, discount rates on 8th of August 2022 SPEB and 3rd of October 2023 SPEB were at 5.25%(previous:5.05%) and 5.40%(previous:5.10%) respectively. Bearish sentiments may keep going until cash hits the system. The exchange rate between the naira and the US dollar closed at N418.75/$1 at NAFEX compared to previous session’s level of N419.25/$1, an appreciation of circa 0.12%.