Money Market
Opening system liquidity plunged into negative territory, with over ₦1 trillion borrowed from the CBN’s SLF window. As a result, the Open Repo Rate (OPR) and the Overnight Rate (O/N) increased by 13 bps and 15 bps to 32.03% and 32.40%, respectively.
Outlook: We anticipate elevated interbank rates, as the CBN plans to conduct an OMO auction tomorrow, offering ₦300bn across 3 tenors.
Treasury Bills
The treasury bills market had mixed sentiments today but settled on a bearish note. There was some demand for the 1-year paper at the early session, with most trades executed at around 19.00%-19.30%. However, the market turned bearish overall following CBN’s announcement of an OMO auction scheduled for tomorrow. As a result, the average mid-rate for the benchmark NTB papers settled at 21.14%.
Outlook: We anticipate the mixed to bearish sentiment will persist tomorrow.
FGN Bonds
The local FGN bonds market also traded bearish as yields continued to trend higher across the curve. Thus, the average mid-yield rose by 2bps to settle at 18.99%.
Outlook: We expect the same sentiment to persist tomorrow.
Eurobonds
The Eurobonds market showed mixed to bearish sentiments as mild selling interest was witnessed across Nigeria, Angola, and Egypt papers. The higher-than-expected US CPI data, which printed at 2.40% y-o-y (Est. 2.30%) and Core inflation at 3.30% (Est. 3.20%), drove the bearish bias. Thus, the average benchmark yield for Nigerian bonds settled at 9.46%
Outlook: Activity is expected to remain mixed.
Nigerian Equities
Today, the Nigerian bourse had a relatively quiet session, as the NGX-ASI and market capitalization decreased slightly to 97,477.19 points and ₦56.01 trillion, respectively. The day’s performance was mainly influenced by decreases in the share prices of FIDELITYBK, NB, UBA, and STERLINGNG, leading to a 30.36% year-to-date ASI growth. Three of the five major sectors closed in the negative, with the Banking sector recording the most significant decline at 0.22%. Oil and Gas and Consumer Goods sectors also decreased, while Industrial Goods and Insurance sectors remained relatively unchanged.
Outlook: We anticipate the mixed sentiments will persist tomorrow.
Foreign Exchange
The Naira strengthened by 0.16% against the USD at the NAFEM window, reaching an exchange rate of $1 to ₦1,622.57.
Outlook: We expect the volatility to persist.
Commodities
Oil prices rose over 3% due to increased U.S. fuel consumption, Middle East supply concerns, and potential growth in energy demand from the U.S. and China. Brent prices surged to $79.62, and WTI prices to $76.14. In addition, gold prices rose after traders bet on a potential Federal Reserve interest-rate cut, reaching $2,642.70 per ounce.
Outlook: We expect the sentiment to persist.
