Nigeria_Fixed Income Daily: Muted start to week as caution prevails
- Market commentary
§ Interbank Call rate declined 325bps to 8.67% on the back of expected FAAC inflow. At the FX interbank market, the naira remained unchanged at N305.25 at the CBN FX spot market whilst depreciating N29.00 to close at N378.00 at the one-year forward market.
§ Following a strong close to the previous week, the T-bills market opened this week rather muted. Despite modest demand moderating yields on the 38DTM (-170bps), 115DTM (-98bps), and 241DTM (-83bps) bills to 11.81%, 17.16%, and 20.11% respectively, the market closed flat following advances in the yields of the 52DTM (+332bps) and 101DTM (+122bps) bills to 14.04% and 17.69% respectively. In contrast, the bond market traded notably bearish as yields advanced on all benchmark bonds, eventually closing 8bps higher. In particular, yields on the 15.54% FGN FEB 2020 and 16.39% FGN JAN 2022 bonds rose 12bps and 11bps to 15.76% and 15.67% respectively.
§ Whilst we note that overall market sentiment is bearish, we expect liquidity from anticipated FAAC inflow to somewhat support demand at least in the T-bills space.
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