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Nigeria_Fixed Income Daily: Bond market loses steam
Market commentary
Amidst persistent constrained system liquidity, Interbank Call rate declined to 19% (previous: 32%). At the FX Interbank market, the Naira depreciated 60kobo to NGN282.75/USD.Despite the constrained system liquidity, trading in the T-bills market remained largely bullish as buying momentum strengthened across the space. Yields declined 69bps on average across the traded maturities with the 30DTM (-174bps) and 163DTM (-202bps) bills recording the most notable yield declines to close at 7.21% and 10.70% respectively. However, trading in the bond market turned bearish amidst profit taking with yields up 27bps on average. The 15.10% FGN APR 2017 and 12.1493% FGN JUL 2034 posted the most sizeable advances, up 85bps and 16bps to 13.46% and 14.82% respectively.Whilst we anticipate modest improvement in system liquidity on the back of the expected FAAC inflow due before the end of the week, we expect trading pattern to remain mixed in the coming sessions as investors stay cautious.
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