U.S stocks ended the week on a high note with all gains on Friday. The S&P 500 and Nasdaq 100 each scored a fourth straight week of gains, their longest winning streak since November 2021. Subsequently, Dow Jones gained 1.3% to finish at 33,761.05, S&P 500 gained 1.7% to finish at 4,280.15 while Nasdaq 100 gained 2.1% to finish at 13,047.19. The 10-year yield Treasury fell 4 basis points to 2.848%. Gold spot price added $0.50 to $1,809.70 per ounce while WTI crude oil futures for September fell 2.4% to $92.09 per barrel. Meanwhile, Federal Reserve July minutes comes out on Wednesday. Also, Fed’s Esther George & Neel Kashkari are expected to speak at separate events on Thursday. On the data front, US retail sales report is due Wednesday while U.S. existing home sales, initial jobless claims and Conference Board leading index reports are due Thursday.
From this Monday the Moscow Exchange will allow trading in debt securities for investors from “friendly” countries. These are nations that have not joined the sanctions imposed by the US and allies, ending a six-month freeze implemented by Russia after the start of the invasion of Ukraine. The investors from “unfriendly” countries will remain subject to capital controls, banning them from selling or collecting payments on local securities. Meanwhile, Ukrainian forces reported heavy Russian shelling and attempts to advance on several towns in the eastern region of Donetsk. This has become a key focus over the last six months of war. The General Staff of Ukraine’s armed forces also reported Russian shelling of more than a dozen towns on the southern front, particularly the Kherson region, and an overnight shelling of Kharkiv. Russian equities market has gained slightly this Monday morning with IMOEX up 0.22% to 2,152. Energy group Lukoil, a metals producer Norilsk Nickel and fertilizer producer Phosagro gained the most along with an oil and gas company Tatneft. Gazprom, Sberbank and Surgutneftegas were among the biggest decliners. Russian ruble lost slightly this morning both against US Dollar and EUR, with USDRUB up 0.72% to 61.32 and EURRUB up 0.33% to 62.64. With the allowance of non-residents to trade on Moscow Exchange, some analysts have predicted a 5-7% loss in Russian currency value, as a potential volume of OFZ sales could increase. The coupon payments on four issues of Russian corporate Eurobonds are expected today for a total of $27.5 Million. CBOM, DME Airport and VEON Holdings should pay on their 2023 Euro denominated bonds, while Bank “Otkrytie” sanctioned by the West, should pay on its 2052 ruble bonds.
Bunds open weaker following trend from Friday. The 10Y touched a high of 1.01% before dropping to 0.99%, 1bp down day-on-day. Peripherals mirrored the move on bunds with a relatively weak open;10Y BTPs yields went as high as 2.95% before retreating to 2.93%, 2 basis point firmer intraday. Stocks advanced as investors examined the likelihood of major central Banks’ slowing down on interest rate hikes following China’s rate cut in reaction to a worsening economic downturn. Consequently, the Stoxx 600, opened higher at 441.79 compared to previous session’s closing of 440.87. On the data front, UK CPI is due Wednesday.
The space starts off rather muted so far comparing how we kicked off last week. The U.S CPI data was a major catalyst to the big rally we did witness last week. A delay in the results being announced from Kenya’s presidential elections with no clear winner in early polling did lead to some profit-taking across the Kenyan curve. We did also notice quite a bit of rotation out of ANGOL (profit-taking) into the likes of IVYSCT & SENEGL going into the close of the week. Although, coming into the week, markets may seem light on data, attention in the markets turn to the U.K inflation data, U.S retails sales data and the FED minutes for the July hike meeting all expected later in the week.
Bearish sentiments moderated further in the Nigerian local Secondary Market for Bonds. The whole curve was mostly steady apart from improved offers seen on FGN 27s and 42s.Intraday, average yields were higher by 1bp across board. Consequently, FGN 27s closed at an offer rate of 12.50% ,5 basis points up from previous level of 12.45% while 42s closed at an offer rate of 13.83%, 5 bps up from previous level of 13.77%. Meanwhile, DMO will be offering N75bn each of the FGN 25s,32s and 42s later in the day at the monthly Bonds Auction. Activity in the Secondary Market for Treasury bills was mixed amid ahead of inflation figures expected to be released today. Most of the activity hovered around OMO and SPEB maturities. Consequently, discount rates on 3rd of October 2022 SPEB & 7th of March 2023 OMO were at 11.80% and 10.15% respectively. Finally, the exchange rate between the naira and the US dollar closed at N427.92/$1 at NAFEX compared to previous session’s level of N424.83/$1, a depreciation of circa 0.73%.