Markets lower because of strong economic data, focus on corporates earnings results this week

US equities were traded in red zone on Friday, as economic data beating estimates and boost expectations of further rate hike, while investors wait for the corporates earnings results of many major companies this week. Among others, companies to show the reporting are Activision Blizzard, BP, Walt Disney, PepsiCo and PayPal Holdings. The Dow Jones traded lower 0.4% to 33,926, the S&P Index and the Nasdaq continued lost 1% to 4136 and 1.6% to 12,006, correspondingly. Treasury yields went up dramatically, with the yield on the 2-year note up 19 bps to 4.09% and the yield on the 10-year note increasing 22 bps to 3.61%. US Dollar strengthened with DXY up 0.44% at 103.37.

Ukrainian President Vladimir Zelensky has admitted that the situation for Ukrainian troops in the Donetsk People’s Republic (DPR) where fighting is underway is very difficult. Earlier, acting DPR Head Denis Pushilin said that heavy fighting was raging in Artyomovsk’s (Bakhmut) neighborhoods that used to be controlled by the Ukrainian army. Meanwhile, Alexey Reznikov is vacating the office of Ukraine’s defense minister to be succeeded by military intelligence chief Kirill Budanov, David Arakhamia, leader of the Servant of the People pro-presidential faction, said on Sunday. On the Russian stock markets IMOEX ended last week 0.27% lower at 2,248.30 level, while the RTSI traded 0.25% lower at 1,002.52 points. On the bond space RGBITR (gov bonds) and RUCBITR (corp bonds) have shown slight downward dynamic at 0.04% and 0.02%, correspondingly, which were leveled out today in the morning.

European markets are mostly lower during today’s trading session, following new wave of geopolitical issues between the US and China, and despite strong data on industrial orders in Germany. On the stock markets, the DAX index in Germany traded this morning lower 1.1% at 15,300 level, the CAC 40 in France is down 1.5% at 7,122 level, while the FTSE 100 in the U.K. lost 0.9% to 7,832 points. 10Y GILT and 10Y Deutsche Bundus yields rebounded after slump on Thursday, gaining 20 bps back each. Today investors will have attention on ECB President Lagarde speech.

The NTB secondary market closed on a positive note with average yields dropping by 3bps across the curve. Average yields across the medium end dropped by 12bps while average yields across the short & long ends of the curve, remained unchanged. Jun 8, 2023 saw some buying interest.

In the OMO secondary market, average yields closed flat with average yields across the curve, remaining unchanged.

The FGN bonds secondary market closed on a negative note with average yields across the curve rose by 10bps. Average yields on the short, medium &  long ends rose by 5bps, 15bps & 5bps respectively. The Jan 2026 bond was the worst performer.

SSA opens lower as investors gauge economic outlook. The U.S jobs report released last week Friday came in much stronger than expected, with nonfarm payrolls increasing by 517,000, far more than the estimate of 187,000. This resulted in a sell-off as investors worry that the U.S job report means the Fed has room for more interest rate hikes. With Friday’s session a bloodbath, NIGERIA (-0.25) continues to witness increased rate volatility. Ghana (-0.175) witnessed limited flows last week, with the curve tracing down like the rest of the sovereigns. ANGOLA (-0.275) opens lower alongside the space amid the risk off sentiment.