Friday, January 20, 2018/ 10.50PM /Zedcrest Capital
*** Nigerian MPC Is Said to Be Unlikely to Meet Next Week*** - CBN Sources
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.
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.
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.