Oil falls, equities rise as investors gauge FED’s rate hikes & ukraine conflict

U.S. stock prices went northwards as market participants continued to appraise economic risks emanating from FED’s monetary-policy tightening posture in addition to the ongoing war in Ukraine. The S&P 500 rose 1.4% to 4,520.16, Nasdaq 100 went up 2.2% to 14,191.84 while DOW was up 1.02% to 34,707.94. Crude oil prices stabilized as US indicated steps to help Europe reduce its dependence on Russian natural gas. Consequently, WTI oil price declined by 0.2% to $112.15 per barrel. Gold which is regarded as a haven asset was at $1,955.74, down 0.1% while the yield on 10-year USTs was at 2.37%. Investors are still worried about the consequence of Russia’s invasion and seclusion, including increased raw-material costs that have worsened global inflationary pressures which in turn triggered more aggressive Fed interest-rate increases. There seems to be no light at the end of the tunnel regarding the conflict in Ukraine as the Biden administration is increasingly worried that the Russian President Vladimir Putin may respond dangerously, due to the struggles of his military operation and far-reaching sanctions. Meanwhile, the new jobless claims dropped to their lowest point since 1969 as applications decreased by 28,000 to 187,000 in the week ended March 19, 2022.

European stock markets are expected to open in a mixed fashion Friday, ending the week on a cautious note as the Russia-Ukraine war rages on and energy prices remain elevated. The focus in the E.U now seems to hover around what E.U Leaders plan to do on Russian crude as the leaders now are holding off on new sanctions. So far, the EU has not blocked the importation of Russian crude into the bloc, unlike the U.S., but as the war drags on, there’s likely to be a growing willingness to use Russian energy supplies as a weapon. The U.S. and European Union announced an agreement to try and boost the supply of liquefied natural gas to European countries by the end of 2022 with at least 15 billion cubic meters. The aim is to work with international partners to help the continent wean itself off Russian fuel imports. Under the agreement, EU member states will work to ensure demand for 50 billion cubic meters of U.S. liquefied natural gas until at least 2030. In Europe, stocks seem to keep on struggling for traction as investors are keen to evaluate economic risks from Federal Reserve monetary policy tightening and Russia’s war in Ukraine. The Stoxx Europe 600 index keeps fluctuating (-0.02% as at 11:08 GMT+1) and is heading for its first weekly decline in three and on track for its first quarterly retreat in two years. The DAX futures contract in Germany is trading +0.25% higher so far, the FTSE 100 futures contract in the U.K. is currently down -0.13%, while CAC 40 futures in France is up +0.2%.

On the first day of trading since the 28th of February Russia’s IMOEX closed at 2578 bp, adding 4% up from a previous close of 2400. OFZ and equities continued trading, but short selling is still not allowed. USDRUB is flat at 97, while EURRUB is trading at 110 down from 112 the day before. RUSSIA 28 is now around 34, while RUSSIA 47 is trading at 18. Corporate bonds are mixed with GAZPRU 4.5985 PERP down at 22 from 24 while LUKOIL 3 ⅞ 2030 up at 53. New sanctions against Russia have been announced at the NATO and G7 meetings yesterday.  A list of 59 individuals and entities have been added to the UK sanctions’ list.  Britain froze assets of Russian Railways, Gazprombank and Alfa Bank, and the state-run shipping company Sovcomflot. US has imposed new sanctions on the dozens of Russian defence companies, members of Russian parliament and the chief executive of the country’s largest bank. Meanwhile, US President Joe Biden called for Russia’s removal from the G-20 group of major economies and warned Russia against using biological, chemical, or nuclear weapons in Ukraine.

A somewhat flat start to the space this morning. GHANA seems to still maintain its relative strength from yesterday’s closing despite spending cut headlines opting for the implementation of the e-levy thereby denying any help from the IMF. The most sought-after paper in the near term (GHANA 8 ⅛ 01/18/2026 REGS Corp) continues to take centre stage as prices on the paper have moved over 2pts in the past two days. More RM continued to sell across the space yesterday especially on NGERIA & ANGOL.