Nigeria_Fixed Income Daily: Upbeat sentiment ahead of MPC decision
Market commentary
Amidst further improvement in system liquidity (c.N36 billion), the Interbank Call rate moderated to 17.33% (from 26.17%). At the FX interbank market, the naira appreciated N1.44 to close at N307.25.
Ahead of the conclusion of the MPC meeting, market sentiment turned slightly upbeat in the T-bills space, with yields declining 18bps on average. The most notable yield declines were recorded on the 205DTM (-166bps), 233DTM (-122bps), and 289DTM(-104bps) bills, closing at 17.94%, 18.91%, and 19.86% respectively. Similarly, the bond market traded cautiously with a bullish bias with yields on the benchmark bonds 8bps lower on average. Particularly, yields on the 16.39% FGN JAN 2022 and 12.40% FGN MAR 2036 bonds moderated 11bps and 13bps to 14.67% and 15.06% respectively.
Following the conclusion of its two-day meeting, the Monetary Policy Committee decided to retain all monetary policy tools at current levels. Given that this decision is largely in line with market expectation, we expect a relatively tepid trading pattern in tomorrow’s session.
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