Nigeria_Fixed Income Daily: Bond yields reverse downtrend at midweek
- Market commentary
§ Interbank Call rate declined 33bps to 13.42% amidst a relatively unchanged system liquidity. At the FX interbank market, the naira appreciated N0.50 against the dollar to close at N304.50 at the CBN FX spot rate market whilst the one year forward rate fell N29.00 to N349.00.
§ Demand in the T-bills market remained buoyant in today’s session as yields descended 13bps lower on average. Buying was weighted around the long end of the space with yields on the 253DTM (-27bps), 281DTM (-25bps), and 344DTM (-28bps) bills moderating to 21.20%, 21.61%, and 22.33% respectively. In contrast, sentiment turned somewhat bearish in the bond market as yields reversed recent trend, rising 3bps on average. Notably, yields on the 15.54% FGN FEB 2020 and 12.1493% FGN Jul 2034 bonds advanced 15bps and 6bps to settle at 15.84% and 15.81% respectively.
§ Whilst we expect liquidity from OMO maturity to support demand on bills, we envisage cautious trading in the bond market following the turn in sentiment today.
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