Report

Nigeria_Fixed Income Daily: Mixed trading pattern ahead of auction


  • Market commentary

§ Amidst relatively unchanged system liquidity, Interbank call rate climbed 192bps to 16.75% ahead of tomorrow’s Primary Market Auctions. Meanwhile, the naira depreciated N0.50 to N305.50 against the dollar at the spot market whilst holding firm at N349.00 at the one year forward rate.

§Trading in the fixed income market was mixed albeit with a bullish bias. Yields on T-bills declined 12bps on average though this was largely driven by a 475bps moderation on the 37DTM bill to 8.80%. Notably, yields on the 30DTM (+17bps) and 352DTM (+3bps) bills rose to 14.93% and 21.88% respectively whilst yield on the 190DTM (-20bps) bill fell to 18.64%. The bond market was similarly mixed with yields trending in different directions along the curve. Ahead of tomorrow’s PMA, yields on the 5-year and 20-year bonds advanced 1bp and 4bps to settle at 16.52% and 16.79% whilst yield on the 10-year bond moderated 5bps to settle at 16.65%.

§ We expect market to trade tepidly tomorrow as participants look ahead to the Bonds and T-bills auctions. We highlight that the anticipated liquidity boost from Thursday’s OMO maturity (c.N256 billion) could spur some buying on short-dated maturities, barring larger-than-expected sale at the auction. 

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Vetiva Capital Management
Vetiva Capital Management

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