FIXED INCOME MARKETS
Money Market
Opening system fell slightly by c.3.39% to ₦171.43 billion from ₦177.44 billion recorded yesterday. However, the Open Repo Rate (OPR) and the Overnight Rate (O/N) shed 26bps and 74bps to 15.74%, and 16.21%, respectively.
Outlook: We expect the interbank rates increase tomorrow, as FGN bond auction settlement should drain liquidity.
Treasury Bills
In today’s session, buying interests persisted on the long-dated papers, with few offers. Nevertheless, the average mid-rate closed flat at 9.33%, as players positioned for tomorrow’s auction.
Outlook: We expect activities to be skewed towards the NTB auction tomorrow, as the DMO would be offering treasury bills worth ₦13.58 billion.
FGN Bonds
Activity in the local bonds market was bullish today, following yesterday’s auction result, where stop rates declined significantly across the on-the-run papers. Consequently, average mid-yield rate shed 52bps to settle at 15.11%.
Outlook: We expect the bullish bias to persist in tomorrow’s session.
Eurobonds
The biggest data watch today, the US CPI data, printed lower at 3.10% y/y in November, down from 3.20% y/y in the preceding month. This further boosted confidence for the market, in terms of the US maintaining interest rate at current levels. Overall, market was bullish as forecast (3.10%) aligned with the actual print. However, some profit taking towards the closing bell led to the average mid-yield increasing by 6bps to settle at 10.39%.
Outlook: While market tilt attention to Fed’s interest rate decision tomorrow, activity should stay bullish, pending any major drift in Production Price Index, perhaps, a surprise forward guidance.
Equities
The Nigerian equity market nudged higher today, with UBA (+2.65%) and MTNN (+2.08%) being the major bullish mover. The ASI appreciated by 0.33% to 72, 907.26 points, while the YTD performance climbed back to 40.30%, contributing to a total market capitalization of approximately ₦39.35 trillion. Trading activity was mixed, as total volume declined by 14.86%, while total value traded increased by 52.54%.
Further, the total volume and value traded were both led by JBERGER 42.54 million units and ₦1.46 billion, correspondingly. The Banking and Consumer Goods Indices appreciated by 0.67% and 0.01%, respectively, while the Oil & Gas Index fell by 1.03%.
Outlook: We expect ASI to cross 73,000 points tomorrow.
Foreign Exchange
FMDQ’s Nigeria’s Autonomous Foreign Exchange (NAFEM) slightly depreciated by 0.09% (or ₦0.74) to $/₦865.03 from $/₦864.29 recorded yesterday.
Outlook: The volatility is expected to persist in the interim.
Commodities
U.S. crude oil prices dropped more than 3% as traders worry that the Federal Reserve does not yet have inflation under control. Brent crude was reported at $73.42 per barrel, and West Texas Intermediate (WTI) at $68.77 per barrel, as at printing time. Similarly, Gold prices fell slightly to $1,997.50 per ounce from the previous day.
Outlook: We expect oil prices to remain volatile in the interim.
