US equities advanced higher with S&P 500 and NASDAQ 100 booking its 3rd straight day of gains; treasury yield declined

US stocks closed higher on Thursday with all three benchmarks touching their highest levels in six weeks, as weak economic data was offset by healthy second-quarter corporate earnings from Tesla Inc, and others. Subsequently, this is how the three US stocks benchmarks performed- The S&P 500 increased 1.0% to finish at 3,998.95, Nasdaq 100 increased 1.4% to finish at 12,059.61 while Dow Jones increased 0.6% to finish at 32,036.90. The 10-year Treasury declined 12.7 basis points to 2.908%. Gold price climbed $13.20 to $1,713.40 per once while WTI crude oil declined $1.36 to $99.38 per barrel.

Russia is set to hold referendums in Ukrainian territories occupied by its troops in order to absorb them into Russia as early as September. The project is directed by Kremlin’s deputy chief of staff Kiriyenko and his attention will be focused on the Donetsk and Luhansk regions in Ukraine’s east as well as the southern territories of Kherson and Zaporizhia. In the meantime, Russia has resumed gas flows to Europe via the Nord Stream pipeline after a maintenance shutdown, providing some relief to the continent that was bracing for a complete halt of supplies. Turkey’s officials commented that an accord to resume Ukraine’s grain exports will be signed with Russia this Friday. Russia’s equity’s market gained this Friday morning with IMOEX up 0.93% at 2,073 paring its weekly loss as prices of oil and European natural gas increased. Lukoil and internet company Yandex were among the best performers, while gold producers Polyus and Polymetal slumped more than 2%. Russian currency dropped for the first time in five days with investors weighing Russian Central Bank easing some FX restrictions for foreign banks. USDRUB and EURRUB were both up around 1% and currently trade at 57.53 and 58.09 respectively. Russian local bonds yields fell in anticipation of a key rate cut later today. 10-year benchmark ruble bonds yields were lower by 6 bps to 8.36%.  Although a 50-bps cut is widely expected, inflation data may suggest a probability of a more significant rate cut of 75 to 100 points. A press release of Bank of Russia Board of Directors with the key rate announcement will be published at 13.30 Moscow time.

Bunds open stronger retracing trend from yesterday. The 10Y touched a high of 1.20% before dropping to 1.10%, 10bps down day-on-day. Peripherals mirrored the move on bunds with a relatively strong open;10Y BTPs yields went as high as 3.46% before retreating to 3.37%, 9 basis points firmer intraday. Stocks were little changed as investors gauged earnings results and braced for Feds policy meeting coming up next week. Consequently, the Stoxx 600, opened at 424.53 compared to previous session’s closing of 424.39.

GHANA (-4.50) dominates the headlines after reports that reserves had dwindled to $3 billion from March’s $8.8 billion figure. The rest of the space is holding firmer at the open with ANGOL (+0.50pts) leading at the open. KENINT (+0.25pts) follows on from Thursday’s +3.00pts outperformance with the 48s also joining the 24s in seeing sustained demand.

Activity in the Nigerian local Secondary Market for Bonds was calm amid a sustained weak system liquidity. Bearish sentiments eased further as traders adjusted their offer rates downwards across most of the curve. Intraday, yields were down by an average of 7 bps across board.  Consequently, FGN 26s closed at an offer rate of 11.30%, 20bps down from previous level of 11.50% while 42s closed at an offer rate of 13.65% down 5 basis points from previous level of 13.70%. Activity in the Secondary Market for Treasury bills was slow as money market liquidity frailty persisted. Bearish sentiment was sustained across the curve. Intraday, yields were mostly unchanged across board.   Consequently, discount rates on 16th of March 2023 NTB & 8th of June 2023 NTB were at 6.00% and 6.90% respectively. Finally, the exchange rate between the naira and the US dollar closed at N423.83/$1 at NAFEX compared to previous session’s level of N424.00/$1, an appreciation of circa 0.04%.