Nigeria_Fixed Income Daily: Modest buying ahead of auction
- Market commentary
§ Interbank Call rate advanced 33bps to 25.33% amidst a relatively unchanged system liquidity. At the FX interbank market, the naira held at N305.25 against the dollar in the spot market whilst the one year forward was also unchanged at N355.
§ Sentiment in the fixed income market turned bullish ahead of the Primary Market Auctions scheduled for tomorrow. In the T-bills market, yields moderated 14bps amidst healthy demand across the space. Notable yield changes were recorded on the 44DTM (-131bps), 135DTM (-73bps), and 226DTM (-42bps) bills to 14.85%, 18.67%, and 20.78%. Meanwhile, the bond market traded mixed as yields on benchmark bonds advanced 1bp on average. Whilst yield on the 15.54% FGN FEB 2020 bond moderated 13bps to 15.27%, yields on the 16.39% FGN JAN 2022 and 12.1493% FGN Jul 2034 bonds advanced 6bps and 9bps to 15.12% and 15.47% respectively.
§ Whilst we note the emergence of bullish sentiment in the T bills space, we expect trading to be guided by activities at the Primary Market Auctions slated for tomorrow. At the monthly Bond Auction, the Debt Management Office will be offering N95 billion across the 5-year, 10-year, and 20-year bonds.
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