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N53 billion (c.N17 billion), Interbank Call rate declined 375bps to 19%. At the FX Interbank spot market, the Naira depreciated N2.70 to NGN294.95/USD.
Yields race north as June inflation caps expectation
Market commentary
Amidst moderate improvement in system liquidity to c.​
The National Bureau of Statistics released the June Inflation figure which printed at 16.5% y/y, higher than consensus estimate of 16.2%. With the higher inflation figure and still moderate system liquidity, trading in the T-bills market turned mixed (with a bearish bias) as yields rose 44bps on average across maturities. Notably, the 101DTM (348bps) and 262DTM (352bps) recorded the most notable uptick in yield to 15.09% and 14.86% respectively whilst the 31DTM (94bps) and 52DTM (136bps) recorded the most notable declines in yield to close at 12.29% and 13.16% respectively. However, trading in the bond market was strictly bearish with yields up 58bps on average across maturities. The 15.54% FGN FEB 2020, 16.00% FGN JUN 2019, and 16.39% FGN JAN 2022 bonds recorded the most sizeable advances in yield, up 100bps, 67bps and 69bps respectively to 14.66%, 15.17% and 14.93%.​
With the June inflation figure printing higher than expected coupled with sustained tight system liquidity, we expect the risk off sentiment to persist in fixed income market in the coming sessions.
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