Money Market
System liquidity remained positive and improved despite today’s foreign exchange (FX) settlement. As a result, funding rates eased significantly. Specifically, the Overnight Policy Rate (OPR) decreased by 3.71% to 21.14%, while the Overnight Rate (O/N) fell by 3.55% to 21.45%.
Outlook: : We expect the interbank rates to remain stable, barring any major catalyst.
Treasury Bills
The treasury bills market concluded the month on a mixed note, with sideways interests across specific maturities. Overall, the average mid-rate for the benchmark NTB rose by 9 bps, closing at 21.56%.
Outlook: We expect a relatively quiet start to the new month.
FGN Bonds
The local bonds market experienced a relatively bullish theme, although trading volumes were limited. The primary interest was focused on February 2031, May 2033, February 2034, and June 2053 bonds. Overall, the average mid-yield decreased by 4 bps, settling at 19.02%.
Outlook: We expect a similar play tomorrow.
Eurobonds
The Eurobond market faced a severe downturn today, as the African curves felt the impact of disappointing quarterly results from major technology companies. The S&P 500 fell by 1.4%, while the Nasdaq Composite declined by 2.3%. Both indexes are on pace for a second consecutive day of losses. Microsoft’s shares dropped by 5.5% after the tech giant’s revenue forecast let down investors, overshadowing a positive quarterly earnings report. Meta Platforms experienced a 4% decline after the parent company of Facebook fell short of Wall Street’s user growth expectations and warned of a significant increase in capital expenditures for 2025. As a result, the average mid-yield for Nigerian bonds rose by 22 bps, closing at 9.64%.
Outlook: The US jobs report will take priority tomorrow, so we expect a mixed start to the new month.
Nigerian Equities
The Nigerian stock market closed the month on a bearish note, with selling pressure prevailing despite the earnings reports released by several companies. The NGX-ASI decreased by 38 bps to 97,651.23 points, and the market capitalization fell to ₦59.17 trillion. This decline was primarily driven by sell-offs in ARADEL, TRANSCORP, and FBNH, which outweighed the buying interest in ZENITHBANK, GTCO, and CONOIL. Sector performance was mixed: the Banking, Insurance, and Oil & Gas indices saw gains, while the Industrial Goods and Consumer Goods sectors experienced declines.
Outlook: We expect a calm start to the new month, albeit with a mixed undertone.
Foreign Exchange
The Naira declined on the last day of the month, with a 2.72% decrease in its value against the USD at the NAFEM window, closing at $/₦ 1,675.49.
Outlook: We anticipate that the volatility will continue.
Commodities
Oil prices increased by 1% following a previous day’s surge driven by stronger-than-expected fuel demand in the U.S. and news that the OPEC+ group may postpone a proposed rise in output. Brent crude rose to $73.10, while WTI climbed to $69.07. On the other hand, gold prices fell as they consolidated after reaching an all-time high. However, ongoing safe-haven interest linked to a tight U.S. presidential election has kept the metal on course for its fourth consecutive monthly gain, with prices hovering around $2,751.40 per ounce.
Outlook: We expect this sentiment to persist.
