Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Tuesday, October 15, 2019 / 10:43 AM / By Zedcrest Capital / Header Image Credit: Caixin Global
Money
market rates shoot up by an average of c.350bps to close at 3-week highs at the
end of the trading session, as market participants provided for FX Wholesale
Auction debits. Despite reaching intraday highs of 25%, OBB and OVN rates
closed today at 16.00% and 16.79% respectively.
Below are
highlights of trading activities in the fixed income and forex market on
October 14, 2019
Bonds
The Bond market opened the week on an active note, with bullish
sentiments witnessed across the yield curve. We noted improved volumes being crossed,
most notably the 2027s and 2034s maturities, as yields dropped by an average of
c.1bps across the benchmark yield curve.
We expect a cautious open to the trading session tomorrow as
market participants look to the outcome of the September 2019 CPI/Inflation due to be
released by the Nigerian Bureau of Statistics to determine market direction.
|
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
14.50 15-Jul-21 |
14.30 |
13.47 |
0.07 |
16.39 27-Jan-22 |
14.15 |
11.73 |
(0.01) |
12.75 27-Apr-23 |
14.38 |
14.30 |
(0.02) |
14.20 14-Mar-24 |
14.18 |
13.73 |
(0.01) |
13.53 23-Mar-25 |
14.24 |
14.06 |
0.00
|
12.50 22-Jan-26 |
14.38 |
14.31 |
0.00
|
16.29 17-Mar-27 |
14.27 |
14.13 |
(0.01) |
13.98 23-Feb-28 |
14.39 |
14.30 |
(0.01) |
12.15 18-Jul-34 |
14.53 |
14.40 |
0.00
|
12.40 18-Mar-36 |
14.53 |
14.44 |
(0.01) |
16.2499 18-Apr-37 |
14.55 |
14.45 |
(0.02) |
14.80 26-Apr-49 |
14.67 |
14.61 |
0.00
|
Source: Zedcrest Dealing Desk
Treasury Bills
The Nigerian T-bills market started the week on bearish note
especially on the short- to mid-end of the NTBills curve. Yields inched higher
by an average of c.39bps across the benchmark NTBills curve, as market
participants faced funding pressures for the FX wholesale auction debits. We
noted continued demand however for long-dated maturities, most notably the
24-Sept-20 & 8-0ct-20 maturities.
We expect the sell-off to cool in tomorrow's session, as funding
pressures reduce and market participants take positions ahead of the Primary
Market Auction slated for later in the week.
Benchmark
Treasury Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
14-Nov-19 |
12.30 |
11.00 |
0.60
|
5-Dec-19 |
12.30 |
10.50 |
0.50
|
2-Jan-20 |
12.50 |
10.80 |
0.32
|
6-Feb-20 |
12.50 |
11.00 |
0.25
|
19-Mar-20 |
12.50 |
11.00 |
0.50
|
2-Apr-20 |
12.50 |
11.25 |
0.20
|
14-May-20 |
12.80 |
11.55 |
0.35
|
04-Jun-20 |
12.50 |
11.25 |
0.40
|
02-Jul-20 |
12.85 |
12.15 |
0.35
|
13-Aug-20 |
12.85 |
12.25 |
(0.10) |
3-Sep-20 |
12.85 |
12.25 |
(0.10) |
1-Oct-20 |
12.85 |
12.35 |
(0.05) |
Source: Zedcrest Dealing Desk
Money Market
Money market rates shoot up by an
average of c.350bps to close at 3-week highs at the end of the trading session,
as market participants provided for FX Wholesale Auction debits. Despite
reaching intraday highs of 25%, OBB and OVN rates closed today at 16.00% and 16.79%
respectively.
We expect rates to moderate in
tomorrow's session as funding pressures ease and market participants benchmark
funding rates to the Standard Lending Facility (SLF) rate of 15.50%.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
16.00 |
11.43 |
Overnight (O/N) |
16.79 |
12.43 |
Source: FMDQ, Zedcrest
FX Market
The Naira/USD remained stable at the
interbank, as the Naira/USD spot, SMIS rates and I&E FX window closing
rates remained unchanged from the previous week's close.
The cash and transfer rates at the parallel
markets also remained stable, closing at N358.00/$ and N362.50/$ respectively.
FX Market |
||
|
Current (N/$) |
Previous ( N/$) |
CBN Spot |
306.95 |
306.95 |
CBN SMIS |
358.13 |
358.13 |
I&E FX Window |
362.13 |
362.13 |
Cash Market |
358.00 |
358.00 |
Transfer Market |
362.50 |
362.50 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA
Sovereigns had a quiet trade session, with little activity today witnessed.
Yields across the sovereign curve remained unchanged from last week's close, as
the markets shrugged off a 0.87% dip in Brent crude prices.
The NIGERIA
Corps had a more active session, we noted improved demand for the shorter-dated
papers, the especially the ACCESS 2021, which dropped c.7bps.
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