Nigeria_Fixed Income: Liquidity squeeze propels yields
Market commentary
 Interbank Call rate soared to 103.33% (prev: 13.50%) following CBN directive to banks to submit their bids for the naira forwards auction by 2pm today. At the FX interbank market, naira depreciated N3.27 to close the week at N307.77 whilst the one year forward rate rose 50 kobo to N350.33.
Tight liquidity drove fixed income markets to a bearish close to the week. In the T-bills market, yields advanced 76bps on average with selling weighted towards the short end of the space. Specifically, yields on the 20DTM (+306bps), 34DTM (+257bps), and 76DTM (+192bps) bills rose to 18.06%, 16.98%, and 15.99% respectively. The bond market was similarly bearish as yields rose 10 bps on average across the space save for the 16.39% FGN JAN 2022 bond which moderated 2bps to 14.88%. In particular, yields on the 15.54% FGN FEB 2020, 12.50% FGN JAN 2026, and 12.1493% FGN JUL 2034 bonds advanced 17bps, 12bpps, and 13bps to 15.03%, 15.37%, and 15.10% respectively.
 With no inflows expected at the start of the week to ease system liquidity, we expect the upward trend in yields to persist.
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