Nigeria_Fixed Income Daily: Bulls remain evident at week close
- Market commentary
§ Interbank Call rate advanced 67bps to 10.67% amidst a relatively unchanged system liquidity. Meanwhile, at the FX interbank market, the naira spot rate remained stable at N305.50 whilst the one year forward rate depreciated N29.00 to close at N378.00.
§Mildly bullish sentiment persisted in the T-bills market as yields moderated 13bps on average. Demand was evenly spread across the space with notable movement on the 55DTM (-73bps), 104DTM (-77bps), and 272DTM (-47bps) bills which closed at 13.80%, 15.11%, and 20.56% respectively. Meanwhile, the bond market traded mixed with buying momentum on short to mid-dated bonds contrasting with mild sell offs at the long end of the space. Whilst yields on the 15.54% FGN FEB 2020 and 16.39% FGN JAN 2022 bonds fell 5bps and 4bps to 16.67% and 16.24% respectively, yield on the 14.20% FGN MAR 2024 bond rose 7bps to settle at 16.24%.
§ With modest demand across the T-bills space at week close, we anticipate a positive start to the week, barring any CBN liquidity mop up. However, we expect tepid trading session across the bond space in anticipation of MPC’s decision (due on Tuesday).
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