Nigeria_Fixed Income Daily: Bearish trading persists on strained liquidity
- Market commentary
§ Following the significant liquidity mop up at the close of the past week, the Interbank Call rate rose 100bps to 11.50%. Meanwhile, the naira remained unchanged at N305.25 on the spot market, whilst appreciating N29.00 to close at N349.00 at the one year forward market.
§Amidst strained market liquidity, trading in the T-bills market continued bearish, particularly on the short end of the curve as yields advanced 13bps on average. Recording the largest upward movements were the 10DTM, 31DTM, and 52DTM bills as their yields rose 203bps, 76bps, and 52bps to 14.18%, 13.22%, and 11.12% respectively. The Bond market traded mixed with mild yield advances observed on the mid to long term maturities whilst modest demand ruled the short end of the space. Notably, yields on the 14.20% FGN MAR 2024 and 12.1493% FGN JUL 2034 bonds rose 5bps and 6bps respectively to 16.19% and 15.97% whilst that of the 12.50% FGN JAN 2026 bond moderated 4bps to close at 16.73%.
§ We expect the tepid system liquidity to continue to keep a lid on demand, particularly in the T-bills market. As such, we anticipate further bearish trading in the session ahead.
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