Money Market
System liquidity opened lower today; however, after the OMO auction, interbank rates closed significantly higher. Specifically, the Overnight Policy Rate (OPR) increased by 10.59% to 29.81%, while the Overnight Rate (O/N) rose by 10.67% to 30.36%.
Outlook: We expect system liquidity to drop into negative territory due to the OMO auction settlement. Consequently, interbank rates should remain elevated.
Treasury Bills
The treasury bills market experienced a calm trading session following the announcement of the OMO auction. The CBN offered ₦300 billion but ended up selling c.₦1.447 trillion. Notably, all the volume was allocated to the long-end tenor, with no subscriptions or allotments for the short and medium tenors. As a result, the average mid-rate across the benchmark NTB papers rose by 28 bps, closing at 21.69%.
Outlook: We anticipate a quiet session tomorrow as attention shifts to the NTB auction, where the DMO will offer ₦513.43 billion.
FGN Bonds
The local bonds market ended on a slightly bearish note, with sustained interest observed across the belly and long tenors. Overall, the average mid-yield remained relatively flat, closing at 18.83%.
Outlook: We expect a mixed theme tomorrow.
Eurobonds
The Eurobonds market experienced a setback today, as the US elections influenced the market to close on a bearish note. Trading volumes were low as participants shifted their focus to the polls. Among African bonds, only a few Nigerian corporates saw slight demand, while the sovereign bonds of Nigeria, Angola, and Egypt experienced lower prices. Overall, the average mid-yield for Nigerian bonds increased by 10 bps, closing at 9.70%.
Outlook: We expect the cautious trading to persist.
Nigerian Equities
The Nigerian stock market recovered today from its recent bearish trend, with the NGX-ASI rising by 22 bps to reach 97,123.61 points. This positive shift was fueled by bullish sentiments, particularly in the banking sector, with notable contributions from UBA, Zenith Bank, Access Bank, Fidelity Bank, and FBN Holdings. However, sector performance varied: while the Banking and Oil & Gas indices showed gains, the Insurance, Industrial Goods, and Consumer Goods indices all recorded declines.
Outlook: We expect mixed sentiments to persist.
Foreign Exchange
The Naira appreciated by 33 bps against the USD, closing at ₦1,671.32 in the NAFEM window.
Outlook: We anticipate that the volatility will continue.
Commodities
Oil prices remained stable, following a more than 2% rise in the previous session due to OPEC+ postponing its December production increase. As a result, Brent crude reached $76.08, while WTI rose to $72.55. Additionally, gold prices increased as investors prepared for potential political uncertainty, with polls indicating a close race between Donald Trump and Kamala Harris. Gold is currently valued at $2,750.50 per ounce.
Outlook: We expect this sentiment to persist.
