European stocks slip lower, sterling rises on UK job data

US market was closed for Martin Luther King holiday on Monday and will reopen today. US stocks closed higher last week with Dow Jones rising 0.3% to 34,303, the S&P increasing 0.4% to 3,999 and Nasdaq advancing 0.7% to 11,079 following softer consumer prices and a positive start of Q4 earnings season. Dollar edged off its recent seven-month low with DXY up 0.19% at 102.14. The Dollar has seen some support early Tuesday, but the market seems to be convinced now that it has peaked with US Federal Reserve nearing the end of its rate-hike cycle as inflation heads lower. The US calendar is relatively light this week with Retail Sales, Industrial Production and Existing Home Sales in focus. All are expected to fall on a soft side. In the meantime, the US House of Representatives is bracing for a struggle over the federal debt ceiling. The government is expected to hit the Congressionally approved ceiling this Thursday.

Recording to head of Donetsk People’s Republic D. Pushilin Russian forces are finishing to certain improve their position in Soledar, DPR city and continue the offensive in the area of Artemovsk (Bakhmut). On stock markets, the MOEX up 0.11% to 2,224.90 level, while the RTSI traded 0.14% higher at 1024.44. Meanwhile, Russian largest bank Sber reported that their profit fell more than 75% y/y to 4.4 billion USD in 2022 as sanction effected to banking sector. On the bond market RGBI index traded flat at 130.31 level (0.06% lower than Friday) but back to growing this morning to 130.44 level but returned to growth this morning to overcome early January highs above 131 level.

EU stock markets open slightly lower on Tuesday as investors focused on UK labour market release while November ‘s data was revised down. Meanwhile, ZEW index showed that economic sentiment improved in Germany and showed +16.9 points vs -23.3 in December and -15 points forecast. However, this is still not enough to overcome covid restrictions and inflationary pressures in the economy. On the stock markets the DAX index in Germany traded 0.17% lower at 15,107 level, the FTSE 100 in the U.K. dropped 0.31% to 7,843 points while the CAC 40 in France fell 0.29% at 7,023 level.

A muted to lower open for SSA as US treasuries resume trading on a selling tilt. The space struggled to break free from its lethargic open with most names closing about flat save KENINT (+.25) which saw duration getting some bid. NGERIA (-.25) opens as the government seeks to convert an equivalent USD50 billion overdraft with the central bank into a 40-year bond. On a somewhat positive note, Nigeria’s December inflation slowed to 21.3% from November’s 21.5% on the back of slowing food-price growth; core inflation rose to 18.5% from 18.2% though. GHANA opens flat following the government’s extension (yet again) of the deadline for participation in the proposed local debt restructuring to 31 January.

The NTB secondary market closed on a positive note with average yields dropping by 10bps across the curve. The average yields on the long end dropped by 20bps while on the short & medium tenors, average yields closed flat. In the OMO secondary market, average yields closed flat across the curve with the short, medium & long ends remaining unchanged.

The FGN bonds secondary market closed on a negative note with average yields across the curve rising by 3bps. Average yields on the short, medium & long ends rose by 15bps, 5bps & 1bps respectively. The Apr 2037 bond was the best performer while the Mar 2025 bond was the worst performer.

**The DMO released the first quarter auction calendar with four tenors (Feb 2028, Apr 2032, Apr 2037 & Apr 2049), to be offered each month (an average volume of N90billion for each maturity).