Nigeria_Fixed Income Daily: T-bills trade bearish following liquidity mop up
- Market commentary
§ The CBN conducted an OMO auction, offering N30 billion and N40 billion on the 143DTM and 297DTM bills respectively. Eventually, the apex bank sold N28 billion and N181 billion across the 143DTM and 297DTM bills at respective stop rates of 18.00% and 18.60% (effective yields: 19.37% and 21.92%). Following the liquidity mop up, interbank call rate rose 184bps to 10.67%. Meanwhile, at the FX interbank market, the naira spot rate depreciated N0.25 against the greenback, closing at N305.25.
§In the T-bills space, yields continued to head northwards, advancing 13bps on average. Specifically, yields on the 31DTM (+34bps), 73DTM (+151bs) and 304DTM (+28bps) bills advanced to 16.63%, 14,27% and 21.40% respectively. The bond market however traded slightly bullish as yields on the benchmark bonds declined 3bps on average. Notably, the 14.20% FGN MAR 2024 and the 15.54% FGN FEB 2020 recorded the most significant declines as their yields moderated 9bps and 4bps respectively to settle at 15.96% and 16.37%.
§ Following the liquidity mop up, we expect the T-bills market to remain bearish. For the bond market, we expect cautious trading in tomorrow’s session ahead of the monthly bond auction scheduled for Wednesday.
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