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Nigeria_Fixed Income: Yields moderate ahead of MPC decision
Market commentary
- Interbank placement rates declined modestly at week open with the Call rate down 50bps to 8.42%. At the FX interbank market, the Naira remained unchanged at NGN199.05/USD, after recording an intraday high of NGN198.96/USD.
- The fixed income market opened the week on a bullish note as market participants continue to speculate about a more dovish stance from the MPC meeting following worse than expected GDP figure (Q1’16: -0.36% y/y). Consequently, yields in the T-bills market declined 14bps on average with the most significant declines recorded on the 108DTM (-61bps) and 143DTM (-53bps) bills, closing at 9.34% and 10.00% respectively. Likewise, yields in the bond market trended 37bps lower as sizeable buying was recorded across all maturities in the bond space. Notably, yields on the 16.00% FGN JUN 2019 and 12.1493% FGN JUL 2034 bonds both declined 60bps to 13.54% and 13.69% respectively.
- Ahead of the conclusion of MPC meeting, we believe buying momentum will ease in the fixed income market tomorrow as participants cautiously await MPC decision.
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