Treasury Market T-bills

Welcome to Nairametrics‘ summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and Bonds. This is brought to you by Zedcrest.

This report is dated May 31stth, 2019.

***Oil falls 3% on fresh trade worries, set for the biggest monthly drop in six months***

 Key Indicators

Bonds: Bond yields retrace slightly today, on the back of some demand interests mostly on the short end of the curve, which was largely due to the lack of an OMO auction by the CBN. Yields were consequently lower by c.5bps, with slight demand also witnessed on the 28s and 37s.

In the coming week, we expect market players to trade on a more cautious tone due to the recent plunge in oil prices from the escalating US trade tensions with its major trading partners.

Treasury Bills: The T-bills market traded on a slightly bullish note with demand mostly on the short end of the curve amid a significantly buoyant system liquidity level from OMO maturity inflows in the previous session. Yields were consequently lower by c.20bps on the day, with slight moderation also witnessed on the mid to long end of the curve.

We expect yields to remain relatively stable opening the new week, barring a renewed OMO sale by the CBN.

Deal book 300 x 250

Money Market: Rates in the money market moderated further by c.2pct as system liquidity remained significantly robust at N418 billion positive. The OBB and OVN rates consequently ended the session at 4.14% and 4.93% respectively.

We expect rates to remain relatively stable opening the new week, barring a significant OMO sale by the CBN.

FX Market: At the Interbank, the Naira/USD rate remained unchanged at N306.95/$ (spot) and N356.92/$ (SMIS). The NAFEX closing rate in the I&E window however increased marginally by 0.01% to N360.74/$, whilst the market turnover rose by 295% to $213m. At the parallel market, the cash and transfer rates remained unchanged at N359.00/$ and N363.00/$ respectively.

Eurobonds: The NIGERIA Sovereigns remained significantly bearish in today’s session as threats of a US tariff on Mexico further aggravated risk off sentiments coupled with further declines in oil prices, with Brent now trading close to $62pb, down by c.3pct on the day.   The most selloff during the session was witnessed on the NIGERIA 49s which lost c.2pct in price terms as the yield curve expanded by c.16bps on the day.

In NIGERIA Corps, we witnessed slight interest in the shorter-dated tickers, with gains in ACCESS, FBNNL and ECOTRA 21s. The FIDBAN 22s were relatively stable, whilst there were better sellers on the ETINL 24s, +9bps higher on the day.


Contact us:

Dealing Desk: 01-6311667 Email: research@zedcrestcapital.com

Disclaimer:

Whilst proper and reasonable care has been taken in the preparation and accuracy of the facts and figures presented in this report, no responsibility or liability is accepted by Zedcrest Capital or its employees for any error, omission or opinion expressed herein. This report is not an investment research or a research recommendation and should not be regarded as such. The information provided herein is by no means intended to provide a sufficient basis on which to make an investment decision.

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