Nigeria_Fixed Income Daily: Bulls dictate market at week close
- Market commentary
§ Interbank Call rate declined 133bps to 11.92% amidst a relatively unchanged system liquidity. At the FX interbank market, the naira depreciated N0.25 against the dollar to close at N305.25 at the CBN FX spot market whilst remaining unchanged at N349.00 at the one-year forward market.
§ Bullish sentiment emerged in the fixed income market at week close with modest demand on both bills and bonds. In the T-bills market, yields declined 77bps on average with all but one maturity shedding in today’s session. Demand was spread across the space with yields on the 55DTM (-419bps), 104DTM (-236bps), and 279DTM (-114bps) bills declining to 10.72%, 16.47%, and 20.70% respectively. The bond market also traded bullish albeit with tepid volumes as yields on benchmark bonds moderated 4bps on average. Buying was weighted on the short-mid dated maturities with yields on the 15.54% FGN FEB 2020 and 12.50% FGN JAN 2026 bonds moderating 10bps and 5bps to close at 15.64% and 15.91% respectively.
§ Whilst we expect liquidity boost from next week’s FAAC inflow to support demand for bills, bond activity should remain relatively calm though with a modest buying bias at the short end.
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