US stocks ended mixed on Monday, after flipping between modest gains and losses as investors await the Fed Reserve policy meeting scheduled on Wednesday which is expected to include another big rate hike. Subsequently, Dow Jones increased 0.3% to finish at 31,990.04, S&P 500 increased 0.1% to finish at 3,966.84 while Nasdaq 100 declined 0.4% to finish at 11,782.67. The 10-year yield Treasury rose 4 basis points to 2.819%. Gold price declined $8.30 to $1,719.10 per ounce while WTI crude oil price gained $2 to $96.70 per barrel. On the data front, US PCE deflator, personal income & University of Michigan consumer sentiment reports are due Friday.

As long-range rocket systems supplied by the US appear to have influenced Russia’s advances in the eastern Donbas region, hopes for the Ukrainian leadership to attempt a counteroffensive started rising. At the same time, Gazprom PJSC said in its statement that it would cut shipments on the Nord Stream pipeline to about 20% of its capacity from 7 am Moscow time on Wednesday, attributing the cut to maintenance necessities. As there is no information on how long it will remain in place, Europe is facing a daunting challenge of building energy stockpiles before winter. Russian stock market opened to the upside this Tuesday with IMOEX gaining 0.69% to 2,144 as European gas prices extended gains on back of the supply news. Energy giants Gazprom, Lukoil and Rosneft were among the gainers together with a gold producer Polymetal, whose shares rose as much as 6.61%.  This followed a yesterday’s drop in metals producer shares to a historic minimum for the reasons of falling output, low gold prices, strong ruble and a lack of clarity on the sale of its Russian assets. Russian ADRS of Cian, VK, Ozon and FixPrice have also gained as Central Bank of Russia announced an automatic conversion of these ADRs with Russian custodians allowing holders getting local shares of the same issuers. Russian ruble fell for the third day in the row post bigger than expected rate cut on Friday. Both USDRUB and EURRUB are up on the day this morning and trade at 58.51 and 59.27 respectively. 10-year benchmark ruble bond yields were little changed at 8.07%.

Bunds open marginally stronger following trend from yesterday. The 10Y touched a high of 1.03% before dropping to 1.00%, 3bps down day-on-day. Peripherals mirrored the move on bunds with a relatively strong open;10Y BTPs yields went as high as 3.23% before retreating to 3.20%, 3 basis points firmer intraday. Stocks dwindled over concerns emanating from risks associated with tighter monetary policy and a worsening energy crisis. Consequently, the Stoxx 600, opened lower at 426.07 compared to previous session’s closing of 426.25.

Another mixed open to the space on Tuesday ahead of the FOMC tomorrow. Monday’s session saw a mixed performance with KENINT (+1.75) and ANGOL (+0.75) outperforming while NGERIA (flat) and GHANA (-0.375) struggling to break free from opening levels. Ghana’s mid-year budget review showed a mixed set of economic forecasts. On one hand, the deficit is seen at 6.6% of GDP (7.4% previous) and the primary surplus seen at 0.4% of GDP (0.1% previous); on the other, growth is now seen at 3.7% (5.8% previous) and interest payments up to 7.5% of GDP (7.0% previous).

Activity in the Nigerian local Secondary Market for Bonds was calm amid a feeble system liquidity. We saw mixed performance across the curve with improved offers on the short to mid end while the long end had some bullish sentiments.  Intraday, average yields were lower by 1bp across board.  Consequently, FGN 25s closed at an offer rate of 11.30%,5 basis points up from previous level of 11.25% while 50s closed at an offer rate of 13.40%, 1bp down from previous level of 13.41%. Activity in the Secondary Market for Treasury bills was slow as weakness in money market liquidity lingered ahead of NTB auction (N264bn total to be offered) slated for this week. Consequently, discount rates on 3rd of October 2022 SPEB & 8th of November 2022 OMO were at 11.30% and 12.30% respectively. Market is expected to remain largely bearish until cash injections via OMO maturities, Bonds coupon payments and FAAC hit the system. Finally, the exchange rate between the naira and the US dollar closed at N423.67/$1 at NAFEX compared to previous session’s level of N423.00/$1, a depreciation of circa 0.16%.