Nigeria_Fixed Income: Market opens to demand as participants await MPC
Market commentary
Interbank Call rate advanced 150bps to 14.00% amidst a relatively unchanged system liquidity. At the FX interbank market, the naira depreciated by N0.50 to N305.00 against the dollar at CBN FX spot rate market whilst the one year forward rate held at N349.00.
Buying resurfaced in the T-bills market at week open with yield declining 35bps on average. Expectedly, demand was weightiest on the short-dated maturities with yields on the 10DTM (-303bps), 17DTM (-361bps), and 24DTM (-337bps) bills declining to 12.25%, 11.36% and 9.82% respectively. Amidst relatively muted reaction to a third consecutive negative quarterly GDP growth figure (Q3’16: -2.24%), yields in the bond market declined 5bps on average, halting an 8-day bearish streak. Nonetheless, we highlight cautious trading in the fixed income space today as market participants await the conclusion of the final Monetary Policy Committee meeting (slated for tomorrow).
We anticipate a relatively cautious trading session in the fixed income market tomorrow as market participants await key policy decisions from the MPC meeting.
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