US equities was in a bullish momentum wednesday while crude oil price declined

US stocks advanced higher on Wednesday as Nasdaq leads stocks to finish higher extending gains from the previous session after Netflix earnings came in better than feared, which boosted investors confidence as they await Fed Reserve Rate hike. Subsequently, this is how the major US stocks displayed, Dow Jones increased 0.2% to finish at 31,874.84, S&P 500 increased 0.6% to finish at 3,959.90 while Nasdaq 100 increased 1.6% to finish at 11,897.65. The 10-year yield Treasury also advanced 1.8 basis points to 3.035%. Gold price declined $3.30 to $1,707.40 per ounce while WTI crude oil price declined $1.36 to finish at $99.38 per barrel.

Russia has resumed gas supply to Europe via a major Nord Stream pipeline after a shut down for maintenance, providing some relief for European continent that was preparing for a complete halt of supplies. However, Russian President Putin warned that unless a clash over sanctioned parts is resolved, flows will be tightly curbed. In the meantime, the Central Bank of Ukraine devalued the hryvnia and will probably keep borrowing costs unchanged. In a rare positive financial development for Ukraine, whose economy is set to shrink by a third this year, a group of governments in the Paris Club agreed to suspend the nation’s debt payments until the end of 2023. Russian equity market traded lower today led by Gazprom, as gas and oil prices fell after Russia resumed its gas supply to Europe. IMOEX lost almost 2.5% to 2,024 with energy giants Lukoil and Gazprom among the worst performers, along with Norilsk Nikel and Sberbank. Polymetal sank as much as 8.6% to its lowest since 2013 after a producer of precious metals announced that its Q2 revenues shrunk by 36% year on year. Russian ruble strengthened on Wednesday gaining for the fourth day. With tax and dividend payments that may total 1.7 trillion rubles due in the next 10 days, ruble strength appears to be inevitable. This morning both USDRUB and EURRUB are mostly unchanged and trade at 55.09 and 56.07 respectively. 10-year benchmark ruble bond yields did not move much as well and stayed at 8.46%.

Bunds open weaker retracing trend from yesterday. The 10Y touched a high of 1.29% before dropping to 1.28%, 1bp down day-on-day. Peripherals mirrored the move on bunds with a relatively weak open;10Y BTPs yields went as high as 3.49% before retreating to 3.47%, 2 basis points firmer intraday. Stocks declined as investors prepared for the imminent interest rate hike by the ECB coupled with political chaos in Italy which also influenced market sentiments. Consequently, the Stoxx 600, opened lower at 421.22 compared to previous session’s closing of 422.51. Focus will be on ECB meeting slated for today.

SSA’s firm run continues following yet another firm session on Wednesday. GHANA shook off early weakness to close 1pt up following approval of a $750 million Afreximbank loan with the belly being particularly bid. With a further $250 million up for approval from other international banks, the strength continues at the open with bonds up 0.375pts.

Activity in the Nigerian local Secondary Market for Bonds was tepid as traders continue to react to the effects of hike in interest rates by the MPC & increased stop rates at the recently conducted Bonds auction amid a feeble system liquidity. Bearish sentiments eased marginally but we still saw elevated offers across most of the curve. Intraday, yields were up by an average of 7 bps across board.  Consequently, FGN 26s closed at an offer rate of 11.50%, 20bps up from previous level of 11.30% while 42s closed at an offer rate of 13.71% same as last trading session. Activity in the Secondary Market for Treasury bills was slow as money market liquidity waned further. We saw a sustained bearish bias across the curve. Consequently, discount rates on 8th of August 2022 SPEB & 26th of January 2023 NTB were at 10.40% and 8.00% respectively. Market is expected to remain bearish pending cash injections into the system via OMO, Bonds coupons and FAAC. Finally, the exchange rate between the naira and the US dollar closed at N424.00/$1 at NAFEX compared to previous session’s level of N422.30/$1, a depreciation of circa 0.40%.