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Nigeria_Fixed Income Daily: Bonds bearish, T-bills upbeat at mid-week
Market commentary
- Interbank placement rates trended further north in today’s session, with the Call rate up 33bps to 5.25%. At the FX interbank market, the Naira remained unchanged at NGN199.05/USD for the third consecutive session.
- Following two consecutive sessions of selloff, demand resurfaced in the T-bills market today with buying focused on the extreme ends of the space - yields declined 21bps on average. Particularly, the 43DTM (-69bps),50DTM (-113bps), 267DTM (-47bps) bills recorded the most sizeable demand to close at 4.89%, 4.78%, and 10.68% respectively. However, sentiment in the bond market maintained a bearish bias as selling across a number of maturities steered yields 4bps higher on average. Notably, yield on the 10.70% FGN MAY 2018 bond rose 27bps to 13.98%.
- Whilst we expect OMO maturity inflow of
N129.6 billion to support demand in the T-bills market tomorrow (barring an OMO auction) - particularly on the short end of the curve, we expect sentiment in the bond market to remain tepid as cautious trading persists.
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