FIXED INCOME MARKETS
Money Markets
Opening system liquidity today decreased to ₦818.00 million long, compared with ₦896.33 million recorded yesterday. However, the Open Repo Rate (OPR) and Overnight Rate (O/N) decreased by 7bps and 4bps to 0.86% and 1.25%, respectively.
Outlook: We expect rates to hover at similar levels next week.
Treasury Bills
The treasury bills market closed flat in today’s session, with minimal activities. Average yield settled at 4.18%.
Outlook: We expect the market performance to skew towards the NTB auction next week, as the DMO is set to offer ₦141.77 treasury bills.
FGN Bonds
Activity in the local bonds market was mixed today, with unaggressive bids and offers across the curve, particularly the 2028, 2032, 2034, 2035, 2037, 2038, and 2053 papers. Consequently, the mid-yield inched up marginally by 1bp to 12.79%.
Outlook: We expect the cherry-picking to persist next week. Although, activity should cool down towards the end of the week ahead of the scheduled July 17 auction.
Eurobonds
Market expressed a bearish remark in today’s session, given less surprises from the US NFP data with a slight decline from estimate. Moreso, the SSA curve sold off, despite expected cushion from increased oil prices due to the extended output cut by Saudi Arabia and Russia. As a result, average yield expanded by 90bps to 12.14%.
Outlook: Next week, we expect attention to be drawn towards speeches by Fed officials and the inflation data, as this should further suggest likely Fed’s decision in the next FOMC meeting. Also, the Federal Government is expected to redeem the 12-July 2023 Eurobond maturity next week, with a total of $515.94 billion in maturity and coupon payments.
Equities
The bullish momentum in Nigerian’s bourse persisted in today’s session, as the NGX ASI appreciated by c.1.65%, to settle at 63,040.41 points, while year-to-date return settled at c 23.00%. Buying interests in ZENITHBANK (+0.25%) and FBNH (+1.30%) drove the positive trend in today’s session. The NGX Oil & Gas, Consumer Goods, Banking, and Industrial Goods Indices appreciated in value by 1.06%, 0.32%, 3.33% and 1.81% respectively. FBNH led both the volume and value charts with c. 131.77 million units, c. ₦ 2.63 billion, respectively.
Outlook: We expect the bullish sentiment to extend next week.
Foreign Exchange
FMDQ’s I & E rate closed at $/₦776.90 as at July 7, 2023, while the NAFEX settled at $/₦749.64 as of July 6, 2023.
Outlook: We expect the volatility to persist next week.
Commodities
Oil prices were largely unchanged on Friday, but set to post weekly gains, as fears of higher U.S. interest rates that could dampen energy demand were offset by signs of tighter supply after a larger-than-expected fall in U.S. oil stocks. Brent oil prices appreciated by c. 0.54% to $76.93pb, day-on-day, while WTI appreciated by c 0.57% day-on-day to settle at US$72.21pb. Spot Gold appreciated by c. 0.27% day-on-day to close at US$1,920.50 per ounce as of report time.
Outlook: We expect oil prices remain stable as concerns about rate hikes offset evidence of shrinking supply.
