Money Market
Opening system liquidity declined today due to debits for the FGN bond auction. The interbank rates showed mixed numbers, with the Open Repo Rate (OPR) decreasing by 5 bps to 20.28%, while the Overnight Rate (O/N) increased by 7 bps to 20.95%.
Outlook: We expect the rates to stay at a similar level tomorrow.
Treasury Bills
The treasury bills market had a quiet session as participants shifted their focus to the NTB auction. However, the market sentiment was bearish, with yields rising following yesterday’s benchmark interest rate hike. As a result, the average mid-rate across the benchmark NTB papers increased by 48 bps to 20.26%.
Outlook: We expect the NTB auction result to influence market direction tomorrow.
FGN Bonds
The local FGN bonds market experienced a bearish trend, with yields rising notably on the 2031 and May 2033 papers in response to yesterday’s interest rate decision. As a result, the average mid-yield rose by 33bps to close at 18.73%.
Outlook: We expect a similar play at tomorrow’s session.
Eurobonds
The African Eurobonds market sustained its bullish theme, with buying interest recorded across the notable curves—Nigeria, Angola, and Egypt. However, the buying subsided as the market drew to a close. Overall, the average benchmark yield across the Nigerian papers declined by 2bps to 9.37%.
Outlook: We expect the same sentiment to persist tomorrow, even as participants look forward to the US’ Q2 2024 Final GDP Reading.
Nigerian Equities
The Nigerian stock market continued its upward trend, with the NGX-ASI rising by 0.42% to reach 98,987.42 points. This positive performance was driven by increased buying of OANDO, UBA, and SEPLAT stocks, which outweighed the selling of FBNH and FIDELITYBK stocks, possibly in reaction to the increased CRR. The sector performance was mixed, with the Industrial Goods, Consumer Goods, and Oil & Gas indices advancing while the Banking and Insurance indices experienced a decline.
Outlook: We expect the same sentiment to persist tomorrow.
Foreign Exchange
The Naira’s value declined by 0.54% compared to the USD at the NAFEM window, ending at a rate of $1 to ₦1667.42.
Outlook: We expect the volatility to persist.
Commodities
Oil prices experienced a decline of over 1% as investors re-evaluated whether China’s recent stimulus measures would effectively boost its economy and increase fuel demand as the largest importer of crude oil. At the time of reporting, Brent prices dropped by 2.26% to $73.49, while WTI prices rose by 2.56% to $69.71. Conversely, gold surged to a new high due to expectations of another substantial interest rate cut by the U.S. Federal Reserve. Currently, gold is showing an increase of 0.81% at $2,677.60 per ounce.
Outlook: We expect the volatility to be sustained.
