US equities mixed, futures rise on earnings boom

U.S stocks were mixed, and futures rose as investors analysed loads of data and reports on earnings. S & P 500 gained 0.21% to 4,183.96, DOW rose 0.19% to 33,301 and NASDAQ 100 declined by 0.01% to 12,488.93. Futures which show likely opening levels for equities are currently positive with the S&P Futures up 1.58% at 4,246.25, DOW Futures up 0.94% at 33,536.00 and NASDAQ Futures in tandem at 13,326.00, up 2.44%. Brent crude dropped to $104.75 per barrel, down 0.50% as China’s covid lockdowns continue to affect outlook on demand. The yield on 10-year USTs declined 3pbs to 2.80% while Gold considered to be a haven asset lost 0.1% to $1.883.81 an ounce. Markets sentiments continue to be affected by the ongoing war in Ukraine, aggressive Fed expectations and fresh covid lockdowns in China.

As Gazprom PJSC turned off gas taps to Poland and Bulgaria, the president of EU Commission Ursula von der Leyen warned companies not to bend to Russia’s demands to pay for gas in roubles. Attention now turned to Germany and Italy with Europe trying to maintain the united front in anticipation of further cuts. US President Joe Biden will deliver remarks this Thursday on support for Ukraine, as his administration looks to send a proposal to Congress for more weapons and humanitarian aid for Ukraine. United Nations Secretary-General Antonio Guterres will meet today with Ukrainian President Zelensky after meeting Putin earlier this week in Moscow. As EU leaders struggled to agree on a new set of sanctions, including an oil Embargo, Russian equities have continued rallying for the third consecutive day with IMOEX gaining 2.3% to 2475 level. Energy companies, including Gazprom, Novatek and Lukoil, were the main gainers. Russian Finance Minister, Anton Siluanov said that Russia may resume sales of sovereign rouble bonds next year, if the market and inflation stabilize. As Russia works on a new budget rule, it may see a cash flow gap of 1.6 trillion roubles this year, which will have to be covered from its wealth fund. Russian sovereign bonds were mostly flat again with Russia 28 trading in mid to high 25s and Russia 47 in low 20s. Russian rouble continued to strengthen with USDRUB trading at around 72.20. An ongoing rouble strength and a decline in inflation expectations, make most analysts believe that they key rate could be cut a much as by 2% this Friday from 17 to 15 %. In other news, Norilsk Nikel should pay coupon today on its Eurobonds maturing in 2026. GMKNRM 2026 rose by 0.5% on the news. GAZPRU 34 and LUKOIL 2030 were also up and trade in high 26s and high 35s respectively.

As Gazprom PJSC turned off gas taps to Poland and Bulgaria, the president of EU Commission Ursula von der Leyen warned companies not to bend to Russia’s demands to pay for gas in roubles. Attention now turned to Germany and Italy with Europe trying to maintain the united front in anticipation of further cuts. US President Joe Biden will deliver remarks this Thursday on support for Ukraine, as his administration looks to send a proposal to Congress for more weapons and humanitarian aid for Ukraine. United Nations Secretary-General Antonio Guterres will meet today with Ukrainian President Zelensky after meeting Putin earlier this week in Moscow. As EU leaders struggled to agree on a new set of sanctions, including an oil Embargo, Russian equities have continued rallying for the third consecutive day with IMOEX gaining 2.3% to 2475 level. Energy companies, including Gazprom, Novatek and Lukoil, were the main gainers. Russian Finance Minister, Anton Siluanov said that Russia may resume sales of sovereign rouble bonds next year, if the market and inflation stabilize. As Russia works on a new budget rule, it may see a cash flow gap of 1.6 trillion roubles this year, which will have to be covered from its wealth fund. Russian sovereign bonds were mostly flat again with Russia 28 trading in mid to high 25s and Russia 47 in low 20s. Russian rouble continued to strengthen with USDRUB trading at around 72.20. An ongoing rouble strength and a decline in inflation expectations, make most analysts believe that they key rate could be cut a much as by 2% this Friday from 17 to 15 %. In other news, Norilsk Nikel should pay coupon today on its Eurobonds maturing in 2026. GMKNRM 2026 rose by 0.5% on the news. GAZPRU 34 and LUKOIL 2030 were also up and trade in high 26s and high 35s respectively.

SSA opens yet weaker even as risk sentiment appears to have taken a turn towards positivity with equities up. GHANA (-2.00) and NGERIA (-1.625) bore the brunt of yesterday’s selling with the latter’s selloff more pronounced later in the session. Both open with continued selling albeit with measured losses so far (sub 0.50 cash).

Activity in the local Secondary Market for Bonds was mixed. Money market liquidity was relatively feeble at N96bn. There was continued interest for most of the long-dated maturities while the short to mid end had bearish sentiments. Intraday, yields were down by an average of 1pb across the curve. Consequently, FGN 28s closed at an offer rate of 11.35%, up 5pbs from previous day’s level of 11.30% while 49s closed at an offer rate 12.82%, down 1bp from previous days level of 12.83%. Secondary Market for Treasury bills was tepid but with some bearish undertones across the curve ahead of auction result. At the auction, stop rates were 1.74%, 3.00% and 4.79% for the 91-day, 182-day and 364-day papers respectively. Day-on-day, average discount rates were mostly unchanged across the curve. However, discount rate on 8th August 2022 SPEB was at 3.15% compared to previous day’s closing of 3.10% while 11th of April 2023 OMO moved in tandem by closing at 4.75% compared to last sessions closing of 4.50%. The exchange rate between the naira and the US dollar closed at N416.72/$1 at NAFEX compared to previous sessions level of N417.18/$1, An appreciation of circa 0.11%.