Welcome to daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills, bonds, FX rates, inflation, oil price.
The report is dated May 3rd, 2019.
***Recurrent expenditure takes 70% of Consolidated Revenue Fund inflow*** — FG
Bonds: The Bond market closed the week on a relatively calm note, with yields relatively flat across the curve, except for slight profit taking on the longer end of the curve (2037s), which had strengthened towards the c.14.50% mark in the previous session. We also witnessed some demand on the 2024s and slight sell interests on the 2021s.
We expect the market to resume the new week on a slightly bearish note, as the CBN is expected to renew its spate of OMO issuances in the money market.
Treasury Bills: Demand interests in the T-bills market remained relatively muted, despite the relatively boisterous system liquidity levels in the money market. This is mostly due to market expectation for a renewed OMO offering by the CBN in the coming week, given further expectations for renewed inflows from FAAC payments into the system.
We expect movement in T-bill yields to be largely determined by the spate and rate of OMO interventions by the CBN in the near term.
Money Market: The OBB and OVN rates declined further by c.1pct, as system liquidity remained positive at c.N250bn. The OBB and OVN rates consequently ended the session at 5.29% and 5.93% respectively.
We expect rates to be slightly pressured by a wholesale FX intervention and possible OMO sale by the CBN opening the new week.
FX Market: At the Interbank, the Naira/USD rate was unchanged at N306.95/$ (spot) and N356.46/$ (SMIS). The NAFEX closing rate in the I&E window, however, appreciated by 0.07% to N360.65/$, whilst market turnover declined by 15% to $161m. At the parallel market, the cash and transfer rates remained unchanged at N358.90/$ and N363.50/$ respectively.
Eurobonds: The NGERIA Sovereigns traded on a relatively flat note, with yields marginally higher by c.2bps on the mid end of the curve.
In the NGERIA Corps, investors remained bullish on the ETINL 24s, with resurgent interests also witnessed on the Access 21s Snr. We however witnessed slight profit taking on the DIAMBK 19s and Access 21s Sub.
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