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Nigeria_Fixed Income Daily: Sentiment weak amidst tight liquidity
Market commentary
- Amidst tighter system liquidity (c.
N17 billion), Interbank Call rate rose 375bps to 22.8%. At the FX Interbank spot market, the Naira depreciatedN9.15 to NGN292.25/USD whilst trading at one year forward closed at NGN317.82/USD.
- Trading in the T-bills market turned bearish at week close as sell pressure weighted across the short – mid dated maturities drove yields 13bps higher on average. The most notable sell offs were recorded on the 20DTM (+74bps), 48DTM (+142bps), 125DTM (+50bps) bills closing at 12.19%, 12.92%, 12.57% respectively. Similarly, tepid trading sentiment persisted in the bond market as yields rose 14bps on average across all maturities. Particularly, yields on the 16.00% FGN JUN 2019 and 15.54 FGN FEB 2020 bonds advanced 28bps and 43bps to 14.27% and 14.60% respectively.
- As markets await the release of the June inflation figures (scheduled to be released on Monday) amidst the tight system liquidity, we expect participants to adopt a cautious trading stance (with a relatively bearish bias) at week open.
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