Inflation Figures Hit A Three-Month High as Money Market Rates Drop to Single Digits

Proshare

Wednesday, October 16, 2019 / 10:43 AM / By Zedcrest Capital / Header Image Credit: Financengr


Below are highlights of trading activities in the fixed income and forex market on October 15, 2019


Bonds

The Bond market traded on a cautious note, with mixed sentiments noted on across the curve. We noted buying interests at the short- (2022s) and long-end (2034s) of the curve, while the mid-end (2025s) were sold-off in the day's trading session. Yields consequently closed higher by c.1bp on the average across the benchmark bond curve.

 

With inflations figures inching up by 22bps from the previous, we expect a cautious opening to tomorrow's trading session as investors continue to evaluate the real return on their portfolios.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

14.32

13.47

0.02

16.39 27-Jan-22

14.16

13.72

0.01

12.75 27-Apr-23

14.40

14.28

0.02

14.20 14-Mar-24

14.19

13.72

0.01

13.53 23-Mar-25

14.34

14.18

0.10

12.50 22-Jan-26

14.38

14.28

0.00

16.29 17-Mar-27

14.27

14.10

0.00

13.98 23-Feb-28

14.39

14.28

0.00

12.15 18-Jul-34

14.53

14.34

0.00

12.40 18-Mar-36

14.49

14.31

(0.04)

16.2499 18-Apr-37

14.52

14.43

(0.03)

14.80 26-Apr-49

14.67

14.59

0.00


Source: Zedcrest Dealing Desk

 

Treasury Bills

The T-bills market traded bullish across the short- to mid-end of the NTBills curve, while yields on the long-end retraced higher. We noted significant demand on some December - February maturities, as market players position ahead of the PMA to hold tomorrow. We however also noted a slowdown of the demand for maturities at the long-end due to the prospect of higher yields at the coming PMA, most notably the October maturities which closed higher by c.15bps.

 

We expect a quiet market as market participants shift focus to the Primary Market Auction coming up tomorrow.


             Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

14-Nov-19

11.20

10.00

(1.10)

5-Dec-19

11.70

11.10

(0.60)

2-Jan-20

12.00

11.05

(0.50)

6-Feb-20

12.50

11.00

0.00

19-Mar-20

12.00

11.00

(0.50)

2-Apr-20

11.75

11.25

(0.75)

14-May-20

12.80

11.50

0.00

04-Jun-20

12.75

11.60

0.25

02-Jul-20

12.85

12.20

0.00

13-Aug-20

12.85

12.30

0.00

3-Sep-20

12.70

12.30

(0.15)

1-Oct-20

12.90

12.35

0.05

Source: Zedcrest Dealing Desk

 


Money Market

Money market rates crashed by an average of c.700bps from yesterday's close. Market liquidity figures opened with c.N250bn, with FX auction refunds providing some respite to system liquidity levels. OBB and OVN rates closed today at 8.43% and 9.14% respectively.

 

We expect rates to remain stable at single digits, with no expected outflows being provided for by banks.


                          Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

8.43

16.00

Overnight (O/N)

9.14

16.79

Source: FMDQ, Zedcrest

 

  

FX Market

The Naira/USD remained stable at the interbank, as the Naira/USD spot and SMIS rates remained stable at N306.95/$ and N358.13/$ respectively. At the I&E FX window, depreciated by 50k the previous day.

The cash and transfer rates at the parallel markets also remained stable, closing unchanged 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

362.63

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 for the second day this week with little activity witnessed. Brent crude prices further dipped from yesterday by 0.64%, but had little effect across the sovereign curve.  

 

We had an active NIGERIA Corps trade session, we noted a sell-off at the short- to mid-end dated papers, especially UBANL 2022 which lost an average of c.19bps.

 

Proshare Nigeria Pvt. Ltd.





Proshare Nigeria Pvt. Ltd.



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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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