FIXED INCOME MARKETS
Money Markets
System liquidity remained negative throughout the week, as there were no significant inflows. Overall, the Open Repo Rate (OPR) and the Overnight Rate (O/N) fell by 22bps and 43bps to 31.39% and 32.02% respectively, compared to the previous week.
Outlook: We anticipate that FAAC Credits and c.₦215.00 billion in FGN bond coupons will hit the system next week to help boost system liquidity.
Treasury Bills
The treasury bills market experienced bearish bias for most of the week due to limited system liquidity. Additionally, the CBN’s mid-week OMO auction resulted in a “no sale” outcome, as investor participation was lacklustre, leading to notably low subscription. Consequently, the average mid-rate increased by 86 bps week-on-week to reach 22.70%.
Outlook: We expect attention to be shifted towards the MPC meeting and NTB auction next week, where the DMO would be offering ₦277.96 billion worth of treasury bills.
FGN Bonds
The FGN local bonds market ended bearish this week as there were selling interests across the curve, particularly for March 2027s, May 2033s, and June 2038s. Thus, the average mid-yield rose by 13 bps to 19.30% week-on-week.
Outlook: Next week’s focus would be the FGN bond auction and MPC meeting.
Equities
The Nigerian stock market ended bullish this week, with the ALL-Share Index increasing0.87% week-on-week to close at 100,539.40 points. The year-to-date return stood at 34.46%, and the market capitalization concluded the week at ₦56.93 trillion.
Outlook: We expect market to continue to trade sideways next week.
Foreign Exchange
Naira depreciated against the USD by 2.12% week-on-week, to $/₦1,596.92.
Outlook: We expect volatility to persist next week.
Eurobonds
The Eurobonds market closed on a bearish note this week, supported by US Housing Stat data, which indicated a figure of 1.35 million, surpassing the estimated 1.30 million and the 1.31 million reported in the previous month. Overall, the average mid-yield on Nigerian curve increased by 24bps week-on-week to 9.91%.
Outlook: We expect market to be partly impacted by US Q2 GDP and PCE Price Index next week.
Commodities
At the end of the week, oil prices showed a mixed performance due to a strong dollar and concerns about China’s economy, despite a tightening supply outlook. Brent oil decreased by 0.58% to $84.54 per barrel, while WTI increased by 0.06% to $82.26 per barrel. In contrast, the price of gold fell by 0.45% to $2,409.70 per ounce.
Outlook: We expect the mixed trend to persist next week.
