Nigeria_Fixed Income Daily: US elections birth bearish sentiment
- Market commentary
§ Interbank Call rate advanced 550bps to 19.17% despite relatively unchanged system liquidity. At the FX interbank market, the naira depreciated N2.49 against the dollar to close at N307.76 at the spot market. Meanwhile, the one year forward rate increased N6.36 to close at N355.
§ On the day of announcement of the President-elect of the United States, sentiment turned negative in the T-bills market as yields climbed 40bps on average. Sell pressure was weighted on the short-mid dated maturities with yields on the 29DTM (+311bps), 120DTM (+198bps), and 197DTM (+102bps) bills rising to 14.49%, 18.76%, and 20.46% respectively. Similarly, bearish sentiment emerged in the bond space with almost all benchmark bonds advancing during today’s session. Notably, yields on the 12.15% FGN JUL 2034 and 12.40% FGN MAR 2036 bonds advanced 4bps each to close at 15.18% and 15.51% respectively.
§ It is likely that sentiment in fixed income market was driven by the surprise outcome of the United States Presidential elections. We expect this to drive further sell offs in tomorrow’s session.
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