Money Market
Following the OMO auction debit, system liquidity plunged further into negative territory, causing a significant surge in interbank rates. Specifically, the Overnight Policy Rate (OPR) rose by 2.09% to 31.90%, while the Overnight Rate (O/N) increased by 2.17% to 32.53%.
Outlook: We anticipate that interbank rates will remain elevated unless there is a significant change to the current liquidity status.
Treasury Bills
The treasury bills market had a quiet trading session as focus turned to the NTB auction. Despite this, there was limited interest in the long-term OMO bills at around the 23.00% level. In general, the average mid-rate for the benchmark NTB papers increased by 11 bps, closing 21.81%.
Outlook: We anticipate a mixed session tomorrow, as participants react to the NTB auction result.
FGN Bonds
The local bonds market experienced a quiet session with a bearish undertone, and only a few trades were executed across specific maturities. Overall, the average mid-yield settled at 18.88%.
Outlook: We expect a mixed theme tomorrow.
Eurobonds
The Eurobonds market saw mixed sentiments today, with participants reacting unpredictably to the election results. Early bullish pressures faded by the end of the session, leading to sideways trading in the Nigeria, Angola, and Egypt papers. Overall, the average mid-yield for Nigerian bonds settled at 9.66%.
Outlook: We expect the cautious trading to persist, ahead of tomorrow’s US FOMC meeting.
Nigerian Equities
The Nigerian stock market experienced a negative performance today, with the NGX-ASI dropping by 57 bps to close at 96,567.20 points. Market capitalization also fell to ₦58.51 trillion. This bearish trend was primarily due to profit-taking in UBA, OANDO, and TRANSCORP, which overshadowed the buying interest in ETI, ACCESSCORP, and FBNH. Sector-wise, the Insurance, Industrial Goods, and Oil & Gas indices saw gains, while the Banking and Consumer Goods indices declined.
Outlook: We expect mixed sentiments to persist.
Foreign Exchange
The Naira weakened by 62 bps against the USD, closing at ₦1,681.65 in the NAFEM window.
Outlook: We anticipate that the volatility will continue.
Commodities
Oil prices declined as the U.S. dollar surged following Donald Trump’s presidential election victory. Investors anticipate that Trump’s policies may strengthen the dollar, necessitating high interest rates to counter inflation, potentially pressuring China’s economy and reducing demand. Consequently, Brent crude dropped to $75.57, and WTI fell to $72.22. Similarly, gold prices dropped significantly after Trump’s projected win boosted the dollar to a four-month high. With the upcoming Fed rate decision, gold faces further downside risk, currently trading at $2,673.00 per ounce.
Outlook: We expect this sentiment to persist.
