U.S. stocks started the week on a weak note as they declined on Monday. The economic calendar was dormant yesterday but will heat up today with a host of global manufacturing and services report. Earnings season is set to head to the finish line with more reports from the retail sector, along with some Tech sector results. Subsequently, Dow Jones declined 1.5% to finish at 33,063.61 S&P 500 declined 1.7% to finish at 4,137 while Nasdaq 100 declined 2.0% to finish at 12,381.57. The 10-year yield Treasury rose from 2.987% to 2.9943%. Gold spot price declined $10.10 to $1,752.80 per ounce while WTI crude oil declined by $3.36 to $87.08 per barrel.
Bunds open slightly weaker retracing trend from yesterday. The 10Y touched a high of 1.35% before dropping to 1.32%, 3bps down day-on-day. Peripherals mirrored the move on bunds with a relatively weak open;10Y BTPs yields went as high as 3.67% before retreating to 3.64%, 3 basis points firmer intraday. Stocks declined as traders analysed economic data that gave an eye opener about the possibility of an economic downturn coupled with other geo-political risks. Consequently, the Stoxx 600, opened lower at 432.17 compared to previous session’s closing of 433.17.
SSA opens largely weaker as core rates continue their ascent with 10Y UST back above 3%. ANGOL (-2.50) underperforming ahead of Wednesday’s elections where the ruling MPLA faces a more competitive fight from UNITA. Elsewhere on the elections front, Raila Odinga – who narrowly lost to William Ruto in Kenya’s presidential elections – filed a challenge at the Supreme Court; KENINT (-0.125) continues weaker. On a more positive note, MOZAM (flat) is set to get $300 million from the World bank for budget financing marking the end of a 6-year freeze that followed sovereign debt non-disclosures to the IMF.
Activity in the Nigerian local Secondary Market for Bonds was dull amid a weak system liquidity level. We saw steady yields across most of the curve. Intraday, average yields were mostly flat across board. Consequently, FGN 25s closed at an offer rate of 12.95%, same as previous trading session while 42s closed at an offer rate of 14.23%, 2 bps down from previous level of 14.25%. Activity in the Secondary Market for Treasury bills was calm as Money Market liquidity remained relatively frail. Most of the activity hovered around OMO and SPEB maturities. Consequently, discount rates on 3rd of October 2022 SPEB & 10th January 2023 OMO were at 12.30% and 12.00% respectively. Meanwhile, there will be an NTB auction on Wednesday with a total of N295bn on offer across the 3 tenors-91,182 & 364 days. Finally, the exchange rate between the naira and the US dollar closed at N426.75/$1 at NAFEX compared to previous session’s level of N428.36/$1, an appreciation of circa 0.38%.