US equities mixed ahead of US CPI report
US stocks ended mostly lower on Monday as they struggled to hold on to earlier gains after all three major stock indexes initially opened higher, as investors await CPI report for July. Subsequently Dow Jones increased 0.1% to finish at 32,832.54, S&P 500 declined 0.1% to finish at 4,140.06 while Nasdaq 100 declined 0.1% to finish at 12,644.46. The 10-year Treasury fell 8 basis points to 2.76%. Gold price increased by $14.70 to $1,805.90 per ounce while WTI crude oil declined $0.60 to $88.41 per barrel.
The US announced a $4.5 Billion package in additional direct budgetary support and military aid to Ukraine, which is the largest drawdown from existing inventories since the war began. At the same time, Russia continued the constant shelling in frontline towns around Donetsk and advanced to the city of Bakhmut. Russian stock market traded lower today with IMOEX losing around 0.5% to 2,078 as oil prices dipped on the possible boost to supply from Iran. Energy giants Gazprom and Lukoil were among the losers along with fertilizer producer Phosagro, Internet company Yandex and Novolipetsk Steel. Russian ruble gained this morning strengthening against the US Dollar by the most in four days with USDRUB losing around 0.5% to 60.27 and EURRUB declining by 0.67% to 61.53. The unexpected decision to allow non-residents to trade only in the futures market, postponing their admission to the stock market may have contributed to the gains of Russian currency according to an analyst. Yesterday the Bank of Russia put a six-month ban on local transaction with securities that were transferred from foreign depositories and authorized holders, unless they were acquired before March 1. Both Russia 28 and Russia 47 continued trading at elevated levels and now offered in high 50s – low 60s.
Bunds open slightly weaker retracing yesterday’s closing. The 10Y touched a high of 0.93% before dropping to 0.91%, 2bps down day-on-day. However, Peripherals were little changed;10Y BTPs yields went as high as 2.872% before retreating to 2.867%, less than 1 basis point firmer intraday. Stock prices declined as investors evaluated inflation risks, corporate earnings amid an imminent economic downturn. Consequently, the Stoxx 600, opened lower at 437.60 compared to previous session’s closing of 438.93.
Bunds open slightly weaker retracing yesterday’s closing. The 10Y touched a high of 0.93% before dropping to 0.91%, 2bps down day-on-day. However, Peripherals were little changed;10Y BTPs yields went as high as 2.872% before retreating to 2.867%, less than 1 basis point firmer intraday. Stock prices declined as investors evaluated inflation risks, corporate earnings amid an imminent economic downturn. Consequently, the Stoxx 600, opened lower at 437.60 compared to previous session’s closing of 438.93.
Activity in the Nigerian local Secondary Market for Bonds was mixed. The short to mid end had improved offers while the long end of the curve remained relatively stable. Intraday, average yields were higher by 5bps across board. Consequently, FGN 25s closed at an offer rate of 11.80% ,15 basis points up from previous level of 11.65% while 49s closed flat at 13.30%. Activity in the Secondary Market for Treasury bills was calm ahead of this week’s PMA. Most of the activity hovered around OMO and NTB maturities. Consequently, discount rates on 26th of January 2023 NTB & 2nd of May 2023 OMO were at 9.80% and 10.10% respectively. Finally, the exchange rate between the naira and the US dollar closed at N425.80/$1 at NAFEX compared to previous session’s level of N424.50/$1, a depreciation of circa 0.31%.