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 17th, 2019.
**May 2019 Inflation stood at 11.40% y-o-y, from 11.37% April 2019.
***Driven by Food inflation at 13.79% (from 13.70%), while Core inflation dropped to close at 9.00% (from 9.30%)
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Bonds: The Bond Market opened the week on a muted note, with some flows witnessed on some short- to mid-dated maturities. Spreads compressed as offers improved across the benchmark bond curve, leaving average yields relatively unchanged at 14.68%.
We expect the market to remain order-driven, as markets stay cautious in the near term ahead of the forthcoming bond auction later this month.
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Treasury Bills: Activities in the Treasury Bills commenced on a positive note, as demand remained for short- to mid-dated maturities given the absence of an OMO auction from the CBN despite buoyant system liquidity. Yields across the Benchmark NTB curve compressed by c.2bps on the average.
We expect the market to remain bullish in the near term, barring an OMO auction by the CBN.
Money Market: Money market rates opened the week higher off the back of funding pressures for the weekly FX Wholesale auction as well as FX swaps by the CBN. OBB and OVN rates closed the session at 8.86% and 9.43% respectively, as system liquidity is estimated to close the day at c.N170bn positive.
With the reduction in system liquidity, we expect the rates to remain at elevated for most of the week, with some respite from OMO maturities of c.N89bn expected later in the week.
FX Market: At the interbank, the Naira/USD rate appreciated by 0.02% to close at N306.95/$ (spot) but remained unchanged at N356.92/$ (SMIS) opening the week. The Naira remained stable at I&E window, to close at N360.50/$.
The cash rate at the parallel market depreciated by 0.25% to close at N360.00/$ while the transfer rate remained unchanged at N362.50/$.
Eurobonds: The NIGERIA Sovereigns saw some positive sentiments return, as US and UK bulls markets paused in the short term. Yields compressed by c.3bps on the average across the sovereign curve, with gains most visible at the short-date papers.
The NIGERIA Corps remained relatively unchanged in quoted prices, however, yield valuations improved across most of the tracked papers.
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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 advice 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.