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Nigeria_Fixed Income Daily: Bond yields moderate at week close
Market commentary
- On the back of a marginal uptick in system liquidity
N248 billion (Previous:N232 billion), interbank Call rate moderated further – down 175bps to 5.0%. At the FX interbank market, the Naira appreciated 30 kobo to NGN198.75/USD, after recording an intraday high of NGN198.00/USD.
- Following yesterday’s selloff, the T-bill market traded mixed at week close with weighty gains clustered around the extreme ends of the space. Whilst the yields on the 13DTM and 237DTM bills moderated 109bps and 62bps to 4.13% and 8.90% respectively, yield on the 48DTM bill rose 46bps to close at 6.55%. However, the bond market traded tepidly at the beginning of today’s trading session with yields largely unchanged within the first hour of trading. Demand soon surfaced across all maturities as yields moderated 12bps on average. Notably, the yields on the 10.70% FGN MAY 2018 and 16.00% FGN JUN 2019 declined 23bps and 42bps to close at 11.68% and 12.35% respectively.
- Whilst we anticipate a see-saw trading pattern at week open as the market continues to alternate between gains and losses, we expect modest demand to persist on the short end of the yield curve as market participants remain cautious.
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