Thursday , January 4, 2018 10:00PM / @ZedcrestCapital
***Brent Crude rises to $68.05, highest level since December 2014***
*** Fitch Says T-Bill Supply Slowdown May Hurt Nigerian Bank Profits***
*** FG grants marketers special FX to resume fuel import***
The bond market traded today on a significantly bullish note with significant demand for the 10– and 20-yr bonds by some local and offshore clients. Average bond yields consequently declined by 20bps to close today at 13.63%. We expect slight support for yields at these levels as market players anticipate release of the Q1 FGN Bond calendar. We however maintain our bullish bias ahead of the bond auction for this month.
The T-bills market traded on a bullish note, with client demand mostly on the Feb and Nov bills, as some market players tried to take some positions on the long of the curve. Yields consequently declined by c.34bps to around 13% levels on avg. We also witnessed sizeable subscription of c.N187bn for today’s OMO auction, with the total amount subscribed sold at 12.70% and 14.50% on the 91- and 189-day bills offered. We expect continued buying interests in the T-bills space in the near term.
The OBB and OVN rates declined slightly to close at 3.67% and 4.49%, as inflows of c.N193bn OMO maturities offset outflows for the OMO auction sales of today. System liquidity is consequently estimated to close at c.N483bn. We expect rates to close slightly higher tomorrow, due to expected OMO and retail FX sales by the CBN.
The CBN Official spot rate remained stable at
its previous day rate of N305.95/$. Rates at the Investors and exporters FX window
depreciated marginally by 0.02% to N361.08/$, while rates at the parallel
market stayed flat at N360.60/$.