U.S stocks kicked out gains on Tuesday as investors’ appetite for risk suddenly reversed about halfway through the session, sparking a tech-led rebound that helped two of the three main U.S benchmarks closer higher. Subsequently, Dow Jones declined 0.4% to finish at 30,967.82, the S&P 500 gained 0.2% to finish at 3,831.39 while Nasdaq 100 increased 1.8% to finish at 11,322.24. The 10-year yield Treasuries advanced 2pbs to 2.830%. Meanwhile Gold price declined $32.30 to $1,769.10 per ounce and WTI crude oil price dropped $7.27 to $101.08 per barrel.

Russia appears to be on track for a shallower recession than initially predicted this year with rising oil production outweighing the impact of Western sanctions. Economists of global banks are now predicting the drop in output this year at 3.5%. Russian stock market was slightly up this morning with IMOEX rising by 1.64% to 2263. A precious metals producer Polymetal and Internet company Yandex were among the leaders, while a fertilizer producer Acron and airlines company Aeroflot were among the losers.  Russian currency plummeted the most in four months dropping by as much as 11% on Tuesday and now trades just below 64 rubles against the US Dollar. EURRUB is currently trading around 65.85. The move was attributed to a broad strength of Dollar as well as gradual removal of ruble supporting measures by Russian authorities. The continued ruble slump would ease the pressure on the Central Bank of Russia to cut interest rates on their next meeting on July 22 and will allow the government to keep capital controls in place. According to a new decree issued by Putin, Russian bonds issuers will soon be able to replace their Eurobonds with local Russian bonds. Russian international Eurobonds remained mostly unchanged with Russia 28 offered in mid 30s and Russia 47 in high 20s.

Bunds open weaker retracing trend from yesterday. The 10Y touched a high of 1.29% before dropping to 1.25%, 4bps 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 3.09%, 3 basis point firmer intraday. Stocks open higher just as investor sentiments remained frail amid indications of a global economic downturn. Consequently, the Stoxx 600, opened higher at 408.38 compared to previous session’s closing of 400.68.

SSA opens mostly weaker as Brent dips about 8% from Tuesday’s highs amid recession concerns. GHANA (+0.25pts) continues in firm fashion as meeting with the IMF over a recovery programme commences. Ghana’s Ministry of Finance will also present a 3-year programme aiming to strengthen central bank policy and build buffers against economic shocks among other objectives.

Activity in the Nigerian local Secondary Market for Bonds was mostly bearish amid persistent frailty in system liquidity. We saw better offers across the curve as Banks adjusted their rates upwards to reflect tightness in the money market. Intraday, average yields were up by 10bp across board. Consequently, FGN 26s closed at an offer rate of 10.21%, 3 basis points up from previous level of 10.18% while 50s closed at an offer rate of 12.97% from a previous level of 12.96%.Activity in the Secondary Market for Treasury bills was bearish as well with Money Market liquidity level declining further. We witnessed sell offs as Banks attempted to create liquidity to fund their obligations. Day-on-day, average discount rates were up across the curve. Consequently, discount rates on 8th of August 2022 SPEB & 29th of August 2022 SPEB were at 8.00% (previous: 6.60%) and 9.00%(previous:6.80%) respectively. Secondary Market for securities is expected to remain bearish pending cash injections into the system. Finally, the exchange rate between the naira and the US dollar closed at N425.44/$1 at NAFEX compared to previous session’s level of N421.50/$1, a depreciation of circa 0.93%.