CBN’s Wholesale FX Auction Pressures Money Market Rates Higher

Proshare

Monday, May 27, 2019   /  08:00PM  /  Zedcrest Capital

 

Rates in the money market inched higher by c.3pct due to funding for the CBN’s Wholesale FX auction. The OBB and OVN rates consequently ended the session at 14.50% and 15.29%, with system liquidity now estimated at c.N15bn. 

Below are highlights from activities in the fixed income and forex market today 

 

Bonds

The FGN Bond market remained relatively stable with slight interests on the short end of the curve, pressuring yields lower by c.2bps on the day. 

Yields are expected to remain relatively stable in the near term, with market players expected to favour the short term bonds over the longer dated bonds.


Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

14.19

13.92

0.00

16.39 27-Jan-22

14.27

13.85

0.00

12.75 27-Apr-23

14.26

14.10

(0.09)

14.20 14-Mar-24

14.33

13.83

0.01

13.53 23-Mar-25

14.15

14.00

(0.08)

12.50 22-Jan-26

14.36

14.27

(0.01)

16.29 17-Mar-27

14.32

14.16

0.02

13.98 23-Feb-28

14.35

14.14

0.00

12.15 18-Jul-34

14.42

14.30

(0.02)

12.40 18-Mar-36

14.45

14.25

0.00

16.2499 18-Apr-37

14.38

14.23

(0.05)


Source: Zedcrest Dealing Desk 

 

Treasury Bills

The T-bills market was relatively flat, with yields relatively unchanged on the day, as a wholesale FX auction by the CBN mopped up the surplus liquidity in the money market. 

We expect rates to remain relatively stable at these levels, as market players look forward to the PMA which would hold upon resumption from the democracy day break. 

 

Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

13-Jun-19

11.00

10.75

0.00

18-Jul-19

11.25

9.40

0.25

1-Aug-19

11.30

9.40

(0.20)

12-Sep-19

11.90

11.60

0.00

3-Oct-19

11.80

11.60

0.00

14-Nov-19

11.95

11.65

(0.05)

5-Dec-19

12.00

11.60

0.00

2-Jan-20

12.05

11.80

(0.05)

6-Feb-20

12.10

11.75

0.00

19-Mar-20

12.10

11.85

0.00

2-Apr-20

12.10

11.85

0.00

Source: Zedcrest Dealing Desk 

 

Money Market

The OBB and OVN rates consequently ended the session at 14.50% and 15.29%, with system liquidity now estimated at c.N15bn. We expect rates to trend slightly lower tomorrow, as there are no significant outflows anticipated.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

14.50

11.14

Overnight (O/N)

15.29

12.00

Source: FMDQ, Zedcrest Research 

 

FX Market

At the Interbank, the Naira/USD rate increased by 0.02% to N306.95/$ at the spot market, while the SMIS rate remained unchanged at N356.92/$. The NAFEX closing rate in the I&E window also increased by 0.06% to N360.59/$, as the market turnover declined further by 37% to $137m. At the parallel market, the cash rate and transfer rate remained unchanged at N359.00/$ and N363.50/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.95

306.90

CBN SMIS

356.92

356.92

I&E FX Window

360.59

360.39

Cash Market

359.00

359.00

Transfer Market

363.50

363.50

Source: CBN, FMDQ, REXEL BDC 

 

Eurobonds

The NGERIA Sovereigns were flat on the day, due to the Bank holidays in the US and UK.   

We still witnessed some local interests in the NGERIA Corps, with demand mostly on the FIDBAN 22s and ETINL 24s.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd. 

 

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Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

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