Nigeria_Fixed Income Daily: T-bill yields rise amidst tight liquidity
- Market commentary
§ Interbank Call rate climbed further at the start of the week (up significantly to 125%) as banks continue to reflect the anticipated tighter system liquidity on the back of CBN’s decision to conduct Secondary Market Intervention Sales (SMIS). At the FX interbank market, naira appreciated N2.77 to open the week at N305.00 whilst the one year forward rate rose N4.77 to N355.00.
§ The bearish trend continued in the T-bills market at week open as yields advanced18bps on average. The largest advances were seen on the 108DTM (+138bps), 206DTM (+93bps), and 220DTM (+154bps) bills which rose to 19.39%, 20.95%, and 21.26% respectively. In contrast, the bond market began the week on a mixed note with yields on benchmark bonds unchanged on average. Generally, we observed a moderation in the yields of short-dated maturities with the 15.54% FGN FEB 2020 shedding 4bps to settle at 14.99% whilst there was an uptick in the yields of long-dated maturities such as the 12.40% FGN MAR 2036 bond which advanced 5bps to 15.47%.
§ With tight liquidity persisting at week open, we anticipate further bearish trading in the fixed income space.
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