Dollar edges higher, S&P ends slightly down on mixed earnings
US equities finished mixed on Tuesday with Dow Jones rising 0.3% to 33,734, S&P shedding 0.1% to 4,017 and the Nasdaq declining 0.3% to 11,334. Corporate results from several Dow members were in focus with 3M missing the estimates, Verizon Communications and Travelers Companies reporting in line with expectations, while Johnson & Johnson reported some disappointing results. The economic calendar offered several reports with PMI unexpectedly rising to 46.8 but remaining in the contraction territory under 50. Treasury yields were lower, as the yield on the 2-year note declined 2 bps to 4.21%, while the yield on the 10-year note decreased 6 bps to 3.46% and the 30-year bond rate lost 8 bps to 3.61%. The Dollar ticked higher with DXY up 0.04% this morning to 101.718. A drop in global energy prices and the resulting slowdown in inflation has spurred speculation the Fed might soon stop raising interest rates, which stalled US Dollar appreciation. DXY fell more than 11% from September’s 20-year high of 114.87. The investors broadly expect the Fed to raise the rates by 25 bps next Wednesday, a step down form a 50 bp increase in December. No major data releases are due from US today with focus on Advance GDP on Thursday
Russian forces continue assaults in Bakhmut direction with heavy casualties. Germany and Norway agreed to ship Leopard tanks to Ukraine, as well as the US have plans to supply their Abrams tanks in couple of months. Russia’s equity market on Tuesday fluctuated back to figures at the beginning of the week: IMOEX ended up DoD down -0.57% to 2167 and RTSI traded 0.83% lower at 990. This week’s opening has shown mixed dynamics: -0.23% in IMOEX and +0.18% in RTSI, provided by ruble strengthening. As for bonds, with RGBITR (gov bonds) and RUCBITR (corp bonds) have shown slight downward dynamic at 0.02% and 0.07%, correspondingly, which were leveled out today in the morning.
European markets open lower today as investors focusing on upcoming economic data later this week in Eurozone and Germany. On the stock markets, the DAX index in Germany traded 0.5% lower this morning at 15,029 level, the FTSE 100 in the U.K. fell 0.11% to 7,747 points, while the CAC 40 in France lost 0.4% at 7,021 level. 10Y GILT and 10Y Deutsche Bundus yields got lower by 5bps and 4bps, correspondingly.
A mixed open to SSA following Tuesday’s tepid session. The space ultimately closed lower yesterday after a firm open save GHANA (+.25), which outperformed on the back of an agreement by banks to the proposed debt swap on GHS debt; even then, the curve closed some .75pts off session highs. NGERIA (-2.125) meanwhile, managed to pare back some losses which had seen duration trade 3pts down intraday. Both open firmer with GHANA (+.50) leading yet again while NGERIA (+.125) is comparatively muted.
The NTB secondary market closed on a flat note with average yields across the curve. Average yields across the short, medium & long ends of the curve remained unchanged. 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 5bps. Average yields on the short & medium ends dropped by 40bps & 1bps respectively however, the long end remained unchanged. The Mar 2024 bond was the best performer while the Apr 2037 bond was the worst performer.
There will be a Primary Market Auction on Wednesday with a total of N219.15 billion on offer across three tenors.
The DMO released bond offer circular for January. A total of N360 billion will be offered across four maturities. Auction will hold on Jan 30, 2023 and to settle on Feb 1, 2023.