Bonds & Fixed Income | |
Bonds & Fixed Income | |
3757 VIEWS | |
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Monday, May 13, 2019 /
07:00PM / Zedcrest Capital / Header Image Credit: People's Pundit Daily
The NGERIA Sovereigns turned bearish in today’s session, on the
back of the escalated tensions between the US and China, which culminated in
retaliatory Tariff measures by the Chinese government; following President
Trump’s increase in tariffs on Chinese goods last Friday.
Below are highlights from activities within the
Fixed Income and FX market today.
Bonds
The Bond market opened the week on a relatively note, with yields marginally higher by c.1bp on the day, as demand interests were relatively muted compared to activities in the previous session.
We
believe yields have found some support at current levels, given the risk off
stance on EM assets from the continued US-China trade spat. We consequently
expect yields to be relatively stable, with slight profit taking expected in
the near term.
Benchmark FGN Bonds
Source: Zedcrest Dealing Desk
Treasury Bills
The
T-bills market remained bullish, despite slight uptick on the short end of the
curve. This came on the back of an absence of an OMO auction which caused
yields to decline further by c.5bps on the mid to long end of the curve.
We
expect yields to remain relatively stable in absence of a renewed OMO auction
by the CBN.
Benchmark Treasury Bills
Source: Zedcrest Dealing Desk
Money Market
The
OBB and OVN rates spiked higher by c.6pct due to the Wholesale FX auction by
the CBN which further drained system liquidity, now estimated at c.N40bn
positive. The OBB and OVN rates consequently ended the session at 16.00% and
16.71% respectively.
We
expect rates to remain relatively unchanged tomorrow, as there are no
significant inflows anticipated.
Money Market Rates
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rate decreased marginally by 0.02% to N306.95/$ at the spot market, while the SMIS rate remained unchanged at N356.60/. The NAFEX closing rate in the I&E window declined marginally by 0.01% to N360.83/$, whilst market turnover fell by 55% to $165m. At the parallel market, the cash rate rose by c.0.06% to N359.00/$, while the transfer rate remained unchanged at N363.50/$.
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns turned bearish in today’s session. Yields were consequently higher by c.10bps on the day, with the heaviest losses on the 2047s which lost c.1pct on the day.
In the NGERIA Corps, we witnessed renewed demand interests on the
FIDBAN 22s and ETINL 24s and slight gains on the ACCESS, FBNNL and ECOTRA 21s.
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