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Nigeria_Fixed Income: Markets bearish ahead of MPC decision
Market commentary
- In anticipation of FAAC inflows, Interbank Call rate dropped 783 bps to 9.75% - its lowest since the start of July. At the FX Interbank spot market, the naira depreciated by
N1.86 to close at NGN309.84. - With an eye on the MPC announcement due tomorrow, the T-bills market traded bearish with yields up 56 bps on average. The change in risk appetite was more evident on the short to mid dated maturities with the 59DTM (+316bps) 101DTM (+376bps) and 129DTM (+597bps) bills closing at 14.86%, 17.23% and 17.09% respectively. Likewise, the bond market traded bearish, with yields up 48bps on average. There was significant sell pressure at the short end of the space as yields on the 9.85% FGN JUL 2017, 9.35% FGN AUG 2017, and 10.70% FGN MAY 2018 rose 290bps, 275bps, and 166bps to close at 18.09%, 17.96% and 16.94% respectively.
- With tomorrow’s MPC decision in mind, we expect cautious trading across the fixed income market as market participants await MPC forward guidance.
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