Nigeria_Fixed Income Daily: Bearish sentiment persists amidst mop up
- Market commentary
§ The CBN held an OMO auction for a third successive day, selling N4.8 billion and N49.0 billion on the 183-day and 358-day bills (N30 billion on offer for each) at respective stop rates of 18.0% and 18.5% (effective yields: 19.78% and 22.60%). Despite this, Interbank Call rate moderated a marginal 17bps to 10.50%. At the FX interbank market, the naira depreciated N1.78 against the dollar to settle at N306.78 at the spot market whilst the one year forward rate remained unchanged at N348.14.
§ Bearish sentiment persisted in the T-bills space today as yields climbed 22bps on average. Sell pressure was concentrated on the short-mid dated maturities with yields on the 22DTM (+120bps), 113DTM (+90bps), and 148DTM (+130bps) bills rising to 16.12%, 18.64%, and 18.64% respectively. The bond market also traded mildly bearish, with yields on benchmark bonds up 2bps on average. The largest advances were recorded on the 15.54% FGN FEB 2020 and 14.20% FGN MAR 2024 bonds which rose 4bps each to settle at 14.99% and 15.00% respectively.
§ Even with a treasury bill maturity due tomorrow, we expect persistent CBN mop up to further constrain demand in the fixed income markets.
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