Nigeria_Fixed Income Daily: T-bills trade bearish following OMO mop up
- Market commentary
§ The CBN conducted an OMO auction in today’s session, offering N20 billion and N30 billion on the 174-DTM and 321-DTM bills respectively. The apex bank eventually sold N19 billion and N178 billion on the 174-day and 321-day bills at respective stop rates of 18.0% and 18.6% (effective yields: 19.69% and 22.24%). Amidst this, Interbank call rate climbed 833bps to 17.83%. Meanwhile, the naira spot and forward rates remained unchanged at N305.50 and N349.00 respectively.
§ The T-bills market traded bearish following the liquidity mop up as yields advanced 14bps on average. Sell pressure was weighted at the short end of the space with yields on the 13DTM (+74bps), 27DTM (+76bps), and 34DTM (+137bps) bills rising to 14.08%, 14.81%, and 10.58% respectively. In contrast, the bond market traded mixed albeit with a bullish bias as yields on benchmark bonds moderated 3bps on average. Notably yields on the 15.54% FGN FEB 2020 and 12.1493% FGN JUL 2034 bonds declined 15bps and 5bps to 15.99% and 15.79% respectively though yield on the 12.40% FGN MAR 2036 bond advanced 5bps to 16.47%.
§ Considering the liquidity mop up at the end of the week, we expect trading in T-bills to start off cautious next week whilst buying momentum continues in the bond space.
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