Nigeria_Fixed Income Daily: Bond yields moderate further whilst T-bills trade mixed
- Market commentary
§ At today’s Primary Market Auction, the CBN offered N28 and N51 billion respectively on the 91DTM and 182DTM bills ahead of tomorrow maturities. Amidst this, Interbank Call rate declined 34bps to 3.83%. At the FX interbank market, naira held at N305.25 and N378.00 against the dollar for the spot rate and one year forward rate respectively.
§Trading in the T-bills space was mixed with no discernable pattern across the space. Whilst yields on the 8DTM advanced sharply (324bps) to 13.24%, yields on the long end of the space, notably on the 316DTM (+42bps) and 309DTM (+26bps) declined to 21.40% and 21.43% respectively. However, the bond market remained bullish across all maturities (save for the 14.50 FGN JUL 2021 bond) with yields declining 8bps on average. The largest declines were seen on the 10.70% 30 MAY 2018, 14.20% 14 MAR 2024, and the 12.40% 18 MAR 2036 bonds with their respective yields moderating 27bps, 10bps and 9bps to 19.01%, 15.39% and 16.10%.
§ We expect trading in the T-bills market to be shaped by the outcome of today’s Primary Market auction. However, we believe the overall trading sentiment might be supported by the anticipated liquidity inflow from OMO and PMA maturities due tomorrow.
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