Wednesday, January 3, 2018 10:00PM / @ZedcrestCapital
*** CBN Manufacturing PMI records ninth consecutive M/M expansion in December 2017***
*** Brent crude hits $67.50 as oil price continues upward ascent***
The bond market traded on a bullish note with slight buys by market players across the curve. Average bond yields consequently declined by 16bps as yields across the curve fell below the 14% mark. We expect a further decline in yields tomorrow, with some buys expected on the short end of the curve.
The T-bills market traded on a relatively quiet note as market players were focused on the T-bills PMA by the CBN today. We however witnessed slight demand for the Apr, Jul. and Nov maturities, as some market players speculated on the outcome of the auction. The T-bills PMA was significantly oversubscribed, especially on the 364-day maturity. Stop rates consequently declined considerably from their previous auction levels to clear at 12.55%, 13.93% and 14.30% on the 91-, 182-, and 364-day bills respectively. We expect the T-bills market to be slightly bullish tomorrow, with significant subscriptions expected at the OMO auction to be conducted by the CBN.
The OBB and OVN rates remained stable to close today at 4.75% and 5.17%, as there were no significant outflows from the system. System liquidity is consequently estimated to remain relatively unchanged from its opening levels of N462billion positive. We expect rates to remain stable at these levels tomorrow, due to anticipated inflows of c.N193bn OMO maturities. This is however barring a significant sale above the OMO maturity volume by the CBN.
The CBN Official spot rate fell by 0.15% to
N305.95/$ from its opening year levels of N305.50/$. Rates at the Investors and
exporters FX window stayed flat at N361.00/$. Rates at the parallel market however
depreciated by 0.11% to close at N360.60/$.