Nigeria_Fixed Income Daily: Demand for bills strengthens on PMA day
- Market commentary
§ Interbank Call rate moderated 58bps to 10.00% amidst a relatively unchanged system liquidity. At the FX interbank market, the naira appreciated N0.25 against the dollar at the CBN spot market to close at N305.00 at the CBN FX spot market whilst the one year forward rate remained unchanged at N349.00.
§ With no OMO announcement in today’s session, buying momentum resurfaced in the T-bills market today with yields declining 37bps on average particularly across the short to mid-dated maturities. Specifically, yields on the 15DTM (-277bps), 36DTM (-114bps), and 113DTM (-128bps) bills declined to 10.01%, 10.05%, and 15.83% respectively. However, trading remained bearish in the bond market as yields on benchmark bonds rose 4bps on average. Sell offs were most apparent on the long end of the space with yields on the 12.1493% FGN JUL 2034 and 12.40% FGN MAR 2036 bonds rising 7bps and 3bps to close at 15.94% and 16.06% respectively.
§ Notwithstanding the improvement in buying momentum, we expect tomorrow’s market activity to be guided by the yet-to-be-released results of the Primary Market Auction held today. In addition, we expect bearish sentiment to persist in the bond market.
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