Slight Uptick in Bond Yields amid MPC Uncertainties


Friday, January 20, 2018/ 10.50PM /Zedcrest Capital

*** Nigerian MPC Is Said to Be Unlikely to Meet Next Week*** - CBN Sources

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The bond market traded on a slightly bearish note, with some sell witnessed on the 2021 and 2027 bonds. Yields consequently rose by 8bps to 13.38% on average. We expect the market to resume the week on a slightly bullish note, with cautious trading expected by market players, on the backdrop of the relative uncertainties surrounding the MPC meeting scheduled to hold ahead of the FGN bond auction.


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Treasury Bills

The T-bills market traded on a relatively flat note, with slight uptick of c.10bps in yields following a continued sizeable OMO issuance by the CBN. The CBN sold a total of c.N7bn 97-day and c.N119bn 244-day bills, with rates maintained at 12.60% and 14.40% respectively. We expect the market to continue trading on a relatively calm note within a range of 13.40% - 14.40% across the curve.


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Money Market

The OBB and OVN rates spiked by 10 percent points to 16.67% and 17.67%, due to funding for retail FX by banks and c.N126bn OMO T-bills sales by the CBN. We expect rates to remain elevated at these levels with further OMO and wholesale FX interventions expected on Monday.


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FX Market

The CBN Official spot rate remained stable at its previous day rate of N305.70/$. Rates at the Investors and exporters FX window appreciated by 0.17% to N360.10/$. Rates at the parallel market however stayed flat at N362.80/$.

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