Nigeria_Fixed Income Daily: Yields drop as liquidity eases
- Market commentary
§ Interbank Call rate plummeted to 18.92% (prev: 151.67%) as the CBN concluded recent Secondary Market Intervention Sales (with the results yet to be announced). At the FX interbank market, the naira appreciated 25 kobo to close at N304.75 whilst the one year forward rate remained unchanged at N355.
§ Vastly improved system liquidity instigated bullish sentiment across fixed income markets in today’s trading. In the T-bills market, yields declined 50bps on average amidst strong buying momentum on short-dated bills. In particular, the yields on the 15DTM (-108bps), 43DTM (-236bps), and 92DTM (-117bps) bills retreated to 16.82%, 15.22%, and 14.05% respectively. Similarly, the bond market turned bullish as yields on benchmark bonds moderated 10bps on average. With demand spread somewhat evenly across the space, the notable declines were recorded on the 15.54% FGN FEB 2020 and 12.50% FGN JAN 2026 bonds which moderated 16bps and 13bps to close at 14.92% and 15.33%.
§ Given the improved liquidity situation, we envisage continued bullish trading tomorrow, subject to the results of the Primary Market Auction held in today’s session.
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