In the global space
It was hard keeping stocks down this week even after a series of volatile trading sessions. Major market indexes all ended in the green for the week as the optimism about a short-term debt ceiling deal trumped a disappointing jobs report. On the treasury scene, the yield on the U.S. 10-year Treasury Note inched higher to reach 1.61%, from its previous week’s print of 1.50%.

This week, Congress reached a deal to raise the debt ceiling into December, preventing what would have been a general government shutdown. Markets also dealt with a rather disappointing, yet conflicting, jobs report; while the economy added 164,000 jobs, well below the market’s expectation of 500,000, the unemployment rate improved to 4.80% from a previous reading of 5.10%. With the debt ceiling kicked down the road, other concerns remain, including accelerating inflation and rising rates.

A bleaker labor picture could stall the Federal Reserve, as it prepares to slow its USD120bn per month bond-buying program. In the following week, a string of earnings announcements is expected to drive markets’ direction as investors anticipate performance in the third quarter.

On the domestic front,

This week, the Nigerian equities finally crawl from their eight-month negative return, raking in 1.61% in wins at the end of the trading week to close at 40,868.36pts. As a result, the year-to-date return printed at 1.48%. Across sectors, trading activities were mixed; while the banking sector and industrial sector posted wins, other sectors closed in the red.

During the week, the Federal government presented the 2022 Appropriation Bill to the National Assembly. The Bill constitutes an aggregate expenditure of NGN16.39trn which is to be funded with a revenue target of NGN10.13trn while the deficit amounts of NGN6.26trn. The budget assumptions are benchmarked on an exchange rate projection of NGN410.15/USD, USD57pb for oil price, and a 13% inflation rate in 2022.

Selling activities dominated market activities at the fixed income market. The average yield on treasury bonds, which has an inverse relationship with prices, increased to 10.66% (from 10.52% the previous week). Similarly, the average yield on treasury bills inched higher to 5.35% (from 5.17% the previous week).