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N402 billion (Previous: c.N996 billion) on the back of FX prefunding, interbank call rate declined 125bps to 4.67%. At the FX interbank market, the Naira remained stable at NGN199.05/USD.With the system liquidity still fairly robust, the T-bills market maintained the buying momentum as yields declined further across most maturities. Demand was mostly weighted on the short end of the curve with the most notable decline in yields recorded on the 13DTM (-41bps) and 48DTM (-34bps) bills. Trading however remained mixed in the bond market with an overall slightly positive bias. Particularly, yield on the 15.10% FGN APR 2017 declined 10bps to 11.01% whilst yield on the 12.1493% JUL 2034 bond advanced 11bps to close at 14.30%.Ahead of the release of the inflation figure for the month of May (scheduled for June 15), we modest anticipate uptick in yield as market participants continue to price in the possibility of a higher inflation rate (Bloomberg Consensus: 14.7% vs. April: 13.8%). Also, we expect the bond market to trade cautiously (with a bearish bias) ahead of the monthly bond auction.
Nigeria_Fixed Income Daily: Buying strengthens in T-bills
Market commentary
Despite a reduction in system liquidity to c.
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