Nigeria_Fixed Income Daily: Bearish sentiment spurs selloff
​Interbank Call rate raced farther north in today’s session, up 584bps to 33.17% (highest recorded in the quarter) as tight system liquidity pressured rates. At the FX interbank market, the naira appreciated N0.57 to close at N314.35.
Bearish sentiment persisted during largely tepid trading session in fixed income markets today. In the T-bills market, yields rose 13bps on average with sell pressure evident across all maturities. The most significant yield changes were on the 57DTM (+179bps), 246DTM (+91bps), and 358DTM (+75bps) bills which closed at 15.28%, 19.47%, and 22.82% respectively. Likewise, the bond market traded bearish with yields advancing on all the maturities on the space. Selloff was however most concentrated on the mid-dated bonds as yields on the 16.39% FGN JAN 2022, 14.20% FGN MAR 2024, and 12.50% FGN JAN 2026 bonds advanced 6bps, 9bps and 8bps to close at 14.81%, 14.97%, and 15.29% respectively.
Given weak market sentiment amidst relatively tight system liquidity, we expect bearish trading to persist in tomorrow’s session.
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