US equities finished last week on a positive note with Dow Jones up 0.1% to 33,978, the S&P rising 0.3% to 4,071 and Nasdaq climbing 1% to 11,622. There were mixed earnings results with Visa exceeding expectations, while American Express missed forecasts but offered upbeat guidance. Chevron and Intel posted disappointed. News on economic front was positive with personal income rising, pending home sales posting a gain and consumer sentiment positively revised. Treasury yields were higher, as the yield on the 2-year bond went up 2 bps to 4.2%, the yield on the 10-year note advanced 3 bps to 3.52% and the 30-year bond rate gained 1 bp to 3.64%. The US Dollar was lower languishing around eight-month low with DXY losing 0.19% to 101.525. The focus this week is on FOMC meeting starting on Wednesday, BOE and ECB on Thursday. Fed is widely expected to deliver a 25-basis-point rate hike, a shift down from its 50 bps and 75 bps increases last year. There will be no significant data today from the US.
Military actions continue in Ukraine, with Herson and Lugansk as main hotspots. According to Ukrainian ambassador to France, US and EU agreed to ship more than 300 tanks to the country. Russia’s equity market on Friday was in green zone: IMOEX ended up +1.04% at 2189 and RTSI traded 0.66% higher at 992, followed by ruble weakness by 0.4% vs USD. Monday opening has shown continuing increase: +0.2% in both IMOEX and RTSI. As for bonds, with RGBITR (gov bonds) and RUCBITR (corp bonds) shown slight upward dynamics at 0.07% and 0.06%, correspondingly, with 10Y benchmark yield at 10.25%increased military spending.
European markets remain vulnerable to the sentiment around Fed meeting and key economic data this week. On the stock markets, the DAX index in Germany traded 0.76% lower this morning at 15,034 level, the FTSE 100 in the U.K. lost 0.24% to 7,746 points, while the CAC 40 in France is down 0.78% at 7,038 level. 10Y GILT and 10Y Deutsche Bundus yields got higher by 1bps and 4bps, correspondingly. Main focus of investors is on the second half of week, where ECB policy decisions and key economic data, especially EU inflation are scheduled to be published.
The NTB secondary market closed on a flat note across the curve. Average yields across the short, medium & long ends of the curve all closed flat.
In the OMO secondary market, average yields closed flat with average yields across the short, medium & longs ends remaining unchanged again.
The FGN bonds secondary market closed on a positive note with average yields across the curve dropping by 15bps. Average yields on the short end dropped by 130bps. Average yields at the long end of the curve rose by 5bps while average yields at the medium end remained unchanged. The Mar 2024 bond was the best performer while the Apr 2037 bond was the worst performer.
SSA opens soft following some selling in NIGERIA (-2.00) last week. Moody’s Investors Service in its latest report released at the weekend said it has downgraded NIGERIA (-1.00) over deteriorating fiscal and debt position. It, however, projected a stable outlook for the country’s economy. Moody’s also lowered Nigeria’s local currency (LC) and foreign currency (FC) country ceilings to B2 and Caa1 respectively, from B1 and B3. ANGOLA (-0.20) also opens lower despite strong performance witnessed in the past week. The government of GHANA (FLAT) and the Ghana insurers association have reached an agreement on the participation of insurance companies in the domestic debt exchange programme (ddep). However, individual bondholders have refused to sign on to the programme.