US equities ended mixed as FED reserve rate-hike fears sparks

US stocks ended mixed on Thursday as investors weighed the possibility that the Fed Reserve would raise the benchmark interest rate by 100 basis points in less than two weeks as they try to crush inflation which is now at 9.1%. Subsequently, the S&P 500 declined 0.3% to finish at 3,790.38, Dow Jones declined 0.5% to finish at 30,630.17 while Nasdaq 100 increased 0.1% finished at 11,251.19. The 10-year yield Treasury increased 5.3 basis point to 2.957%. Gold price declined $29.50 to $1,706.00 per ounce while WTI crude oil price fell 0.5% to $95.78 per barrel.

Russian government has decided to create a national oil benchmark next year with key ministries, domestic oil producers and the Russian Central Bank planning to launch oil trading on a national platform in October. This should help to protect the flow of export revenues from selling energy from Western sanctions and establish a pricing benchmark between March and July 2023. In the meantime, US treasury Yellen confronted Russian officials at global finance gathering in Bali saying they “should recognize that they are adding to the horrific consequences” of Kremlin’s war to Ukraine, as Russian forces continued hitting civilian targets far from the front lines. Russian equity market traded sideways this morning as concerns about global economy kept oil prices below $100 per barrel and European gas prices fell with Norway resuming shipments. IMOEX lost 0.09% to 2061 with Fertilizer producer PhosAgro and Lukoil gaining the most and Telecommunications company MTS losing around 1%. In a volatile trading Russian ruble made small gains against both US Dollar and Euro and ended up gaining 8.38% against the greenback over the course of this week. Both USDRUB and EURRUB trade just above 58 this morning. Gazprom board has discussed placement of Gazprom Capital perpetual bonds, while 10-year benchmark ruble bonds yields rose by 1bp to 8.47% this morning. The Bank of Russia is set to ease further on their policy meeting next Friday with a 50 bp cut to 9% widely expected. Ruble strength and weak price pressure have left some room for policy markets to lend more support to economy.

A mixed open to SSA this morning following Thursday’s run that saw issuers sell off at least 2pts with GHANA and ZAMBIN leading the slide, down 4pts each. Brent’s reversal to top $100/bbl coinciding with a slight uptick in risk sentiment. ZAMBIN (+1.75) back up and trading above the 50 handle ahead of another round of restructuring talks commencing Monday.

Activity in the Nigerian local Secondary Market for Bonds was quiet. We saw improved offers as bearish undertone persisted across most of the curve. Intraday, average yields were mostly higher across board.  Consequently, FGN 25s closed at an offer rate of 10.02% same as previous session while 50s closed at an offer rate of 13.05%, 5bps up from previous level of 13.00%.

Activity in the Secondary Market for Treasury bills was quiet although system liquidity level improved. Day-on-day, average discount rates were slightly higher across board as bearish sentiments persisted. Consequently, discount rates on 13th of October 2022 NTB & 14th of February 2023 NTB were at 9.00% and 8.02% respectively. Market is expected to remain largely bearish pending cash injections into the system. Finally, the exchange rate between the naira and the US dollar closed at N426.50/$1 at NAFEX compared to previous session’s level of N422.86/$1, a depreciation of circa 0.86%.