FIXED INCOME MARKETS
Money Markets
Given today’s FX refund, opening system liquidity improved further with a balance of c.₦992.68 billion long, compared to yesterday’s opening balance of c.₦1,017.09 billion. However, the Overnight Policy Rate (OPR) remained unchanged at 10.50%, while the Overnight Rate (O/N) fell marginally by 1bp to 10.80%.
Outlook: We expect the interbank rates to increase slightly tomorrow, following the expected CRR debit.
Treasury Bills
The bullish rally spilled into today’s session, given the robust system liquidity coupled with expectation of CRR debit tomorrow. The market started off with buy interests, mostly on the 1-year paper. Subsequently, offers flooded the market towards the end of the session to match with the demands. As a result, average yield declined by 38bps to 3.14%.
Outlook: We expect the bullish bias to ease, although, largely influenced by the magnitude of tomorrow’s expected debits.
FGN Bonds
In today’s session, notable demand was observed across 2025, 2037 and 2049 papers, with offers quite shy from bid quotes, leading to a handful of trades executed all day. Consequently, average yield fell by 6bps to 13.48%.
Outlook: We expect a quiet activity tomorrow, as expected debits will dampen the buy interest.
Eurobonds
The risk-off sentiment and unclear progress on Ghana’s talks with China regarding the country’s debt restructuring, fueled today’s selloffs across several maturities in the SSA region. Moreso, the better-than-expected US initial jobless claims spurred more sell interest, as bets of longer US Fed rate hike trajectory wax strong. The average yield advanced by 34bps to 12.19%.
Outlook: We expect the speech by U.S Fed Gov. Waller amongst other Fed’s council members influence market direction tomorrow. Market players will also keep tabs on the Non-farm payrolls data
Equities
The Nigerian bourse closed on a bullish note today, as the Nigerian Stock Exchange All Share Index (NGX ASI) gained in value by c.0.29% day-on-day to close at 55,670.24 points while year-to-date return closed at c.8.62%. Buying interest in DANGSUGAR (9.94%) GEREGU (9.02%), and AIRTELAFRI (0.89%) drove the upward trajectory. The NGX Industrial and Consumer Goods sectors appreciated in value by c. 0.01%, and 0.58%, respectively. However, the Banking and Oil and Gas index declined by c. -1.11%, and c. -0.25% respectively. ACCESSCORP led the volume charts with c. 29.74 million units, while AIRTELAFRI led the value charts with c. ₦ 959.11 million worth of trades
Outlook: We expect the positive sentiment to ease tomorrow, as market players crystalizes profits for the week.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate remained unchanged at ₦ 461.35/US$1.00 from ₦ 461.35/US$1.00 recorded at the close of yesterday.
Outlook: We expect sustained FX pressures, CBN intervention and depreciation of the Naira
Commodities
Oil edged higher today, though gains made on signs of a strong economic rebound in top crude importer China were kept in check by fears over the impact of potential increases to European interest rates. Brent Crude Oil price increased by c.0.34% day-on-day to settle at US$84.63pb, while WTI also increased by c.0.63% day-on-day to settle at US$78.18pb as at the time of this report. Spot Gold depreciated in value by c.0.17% day-on-day to close at US$1,842.30per ounce as of report time.
Outlook: We anticipate more volatilities in Oil prices amid stronger dollar performance and supposed deepening of Russia’s oil supply cuts
