Report
Nigeria_Fixed Income Daily: Yields race north following MPC's rate hike
- Interbank placement rates advanced across all tenors in today’s session (up 178bps on average) – with the Call rate up 262bps to close at 7.4%. At the FX interbank market, the Naira remained unchanged at NGN199.05/USD after recording an intraday high of NGN198.50/USD.
- As expected, yields trended upwards in today’s trading session as market participants reacted to the MPC’s tightening stance. In the T-bills market, yields advanced 69bps on average with the most significant yield increases recorded on the 85DTM (+186bps), 99DTM (+156bps), and 134DTM (+152bps) bills closing at 8.05%, 7.83%, and 8.54% respectively. Similarly, yields on bond maturities rose 46bps on average with the short term maturities recording the most sizeable yield advances (up 64bps on average). Particularly, the 15.10% FGN APR 2017 bond rose 95bps to 10.48%.
- Although we expect the stop rates from today’s T-bills auction to guide trading pattern in tomorrow’s session, we believe market sentiment would remain relatively bearish as the tightening stance of the monetary authority remains in focus.
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