Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Friday, August 16, 2019 / 07:00PM / By Zedcrest Capital / Header Image Credit: ARM
The
T-bills market traded on a bearish note, with yields closing higher by c.50bps,
following selloffs on the short end of the curve. This came on the back of the
drain in system liquidity from the retail FX auction by the CBN and continued
selling interests from offshore clients
Below
are highlights of trading activities in the fixed income and forex market today
Bonds
The
FGN Bond market closed on a relatively calm note, with yields marginally lower
by c.2bps following some bargain hunting by market players, which came on the
back of the relatively high yields levels on the long end of the curve. We
however witnessed continued sell pressures around the 10-yr bucket.
We
expect the FGN Bond yields to remain pressured ahead of the FGN Bond auction
scheduled for next week, where the DMO intends to offer N145bn of the 5, 10 and
30yr bonds.
Benchmark FGN Bonds |
|||
Description |
Bid
(%) |
Offer
(%) |
Day
Change (%) |
14.50 15-Jul-21 |
14.38 |
13.98 |
0.00 |
16.39 27-Jan-22 |
14.42 |
13.86 |
(0.07) |
12.75 27-Apr-23 |
14.33 |
14.13 |
(0.09) |
14.20 14-Mar-24 |
14.25 |
13.93 |
(0.08) |
13.53 23-Mar-25 |
14.24 |
13.88 |
0.00 |
12.50 22-Jan-26 |
14.32 |
14.04 |
(0.06) |
16.29 17-Mar-27 |
14.47 |
14.12 |
0.08 |
13.98 23-Feb-28 |
14.61 |
14.29 |
0.11 |
12.15 18-Jul-34 |
14.50 |
14.26 |
0.06 |
12.40 18-Mar-36 |
14.64 |
14.39 |
(0.07) |
16.2499 18-Apr-37 |
14.57 |
14.33 |
(0.04) |
14.80 26-Apr-49 |
14.69 |
14.52 |
(0.07) |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market traded on a bearish note, we expect yields to remain pressured opening the new week, with a wholesale FX auction by the CBN expected to further strain liquidity levels.
Benchmark Treasury Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
12-Sep-19 |
14.50 |
12.20 |
0.70 |
3-Oct-19 |
14.50 |
13.50 |
0.50 |
14-Nov-19 |
13.00 |
10.60 |
2.10 |
5-Dec-19 |
14.10 |
13.50 |
0.25 |
2-Jan-20 |
14.20 |
13.65 |
0.70 |
6-Feb-20 |
13.95 |
13.75 |
0.45 |
19-Mar-20 |
13.50 |
12.00 |
0.25 |
2-Apr-20 |
13.75 |
13.50 |
0.45 |
14-May-20 |
13.10 |
12.25 |
0.30 |
04-Jun-20 |
13.10 |
12.10 |
0.10 |
02-Jul-20 |
13.10 |
12.25 |
0.10 |
Source:
Zedcrest Dealing Desk
Money Market
Rates
in the money market spiked by c.9pct, as banks funded for the CBN’s Retail FX
auction, which is estimated to have drained the c.N298bn opening system
liquidity balance. The OBB and OVN rates consequently ended the session at
18.00% and 19.57% respectively.
We
expect rates to remain elevated opening the new week, as banks provide funding
for the CBN’s weekly wholesale FX auction.
Money
Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back
(OBB) |
18.00 |
11.71 |
Overnight
(O/N) |
19.57 |
12.64 |
Source: FMDQ, Zedcrest
FX Market
At the interbank, the Naira/USD spot rate remained unchanged at
N360.90/$, while the SMIS rate rose by 28k to N357.96/$. The NAFEX rate at the
I&E window was relatively unchanged at N363.42/$, whilst the cash and
transfer rates at the parallel market remained stable at N358.00/$ and
N363.00/$ respectively.
FX Market |
||
|
Current (N/$) |
Previous ( N/$) |
CBN Spot |
306.90 |
306.90 |
CBN SMIS |
357.96 |
357.68 |
I&E FX
Window |
363.42 |
363.46 |
Cash Market |
358.00 |
358.00 |
Transfer
Market |
363.00 |
363.00 |
Source: CBN,
FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns rebounded from the selloffs in the previous session, with yields trending lower by c.15bps on the day. The most gains were recorded on the 47s and 49s, which gained almost 2.5pct at its intra-day high, before moderating to c.1.5pct later in the session.
In the NGERIA corps, we witnessed selling interests on the ACCESS 21s and ZENITH 22s, whilst we witnessed some demand on the FIDBAN 22s. Yields remained relatively stable, except for some weakness in the ZENITH 22s.
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