U.S stocks ended off sessions lows on Wednesday, minutes after FOMC meetings which indicated that policy makers were prepared to raise rates but were sceptical of overdoing it. Minutes of the July meeting, at which policy makers delivered a 75-basis point rise, said the officials worried about the “significant risk” that elevated inflation could become entrenched if the public began to question the Fed’s resolve to hike rates by enough to rein in inflation. Subsequently, Dow Jones declined 0.5% to finish at 33.980.32, S&P 500 declined 0.7% to finish at 4,274.04 while Nasdaq 100 declined 1.3% to finish at 12,938.12. The 10-year yield Treasury rose 6 basis point to 2.882%. Gold spot price declined $8.70 to $1,781 per ounce while WTI crude oil rose 1.8% to $88.11 per barrel.

U.S stocks ended off sessions lows on Wednesday, minutes after FOMC meetings which indicated that policy makers were prepared to raise rates but were sceptical of overdoing it. Minutes of the July meeting, at which policy makers delivered a 75-basis point rise, said the officials worried about the “significant risk” that elevated inflation could become entrenched if the public began to question the Fed’s resolve to hike rates by enough to rein in inflation. Subsequently, Dow Jones declined 0.5% to finish at 33.980.32, S&P 500 declined 0.7% to finish at 4,274.04 while Nasdaq 100 declined 1.3% to finish at 12,938.12. The 10-year yield Treasury rose 6 basis point to 2.882%. Gold spot price declined $8.70 to $1,781 per ounce while WTI crude oil rose 1.8% to $88.11 per barrel.

Bunds open weaker following trend from yesterday. The 10Y touched a high of 1.15% before dropping to 1.12%, 3bps down day-on-day. Peripherals mirrored the move on bunds with a relatively weak open;10Y BTPs yields went as high as 3.21% before retreating to 3.19%, 2 basis points firmer intraday. Stocks declined as investors examined federal reserve’s viewpoint on monetary policy coupled with economic growth risks. Consequently, the Stoxx 600, opened lower at 438.96 compared to previous session’s closing of 439.03.

The space starts with a weak opening continuing from where we closed yesterday. Might just be another day of heavy price action across the space with RM flows leaning on risk, the likes of ANGOL (-1.25) & NGERIA (-1.125) bearing most of the brunt from the sell-off as both seemingly lost at least 5-6pts down from its opening on Monday. As stated yesterday with markets waiting to see/read the FED minutes from July with the expectation of an aggressive hike up until Q1 2023 with possibly a 60bps cut, the minutes were seemingly less hawkish than expected. Furthermore, the minutes also went on to show the FEDs focus remains on inflation risk and growth risk obviously pushing back on the idea of aggressive rate cuts next year and highlighting that once the FED reaches close to the terminal rate, it is likely to stay close to that level for some time.

Activity in the Nigerian local Secondary Market for Bonds had a bearish sentiment. We still saw improved offers across the short to mid end of the curve while the long end had dampened offers. Intraday, average yields were up 5 basis points across board.  Consequently, FGN 25s closed at an offer rate of 12.65% ,20 basis points up from previous level of 12.45% while 50s closed at an offer rate of 13.45%, 5 bps down from previous level of 13.50%. Activity in the Secondary Market for Treasury bills was average amid a relatively weak system liquidity level. Most of the activity hovered around OMO and SPEB maturities.  Consequently, discount rates on 29th of August 2022 SPEB & 28th of November 2022 SPEB were at 12.80%(previous:12.50%) and 12.35%(previous:12.25%) respectively. Finally, the exchange rate between the naira and the US dollar closed at N426.70/$1 at NAFEX compared to previous session’s level of N428.88/$1, an appreciation of circa 0.51%.