FIXED INCOME MARKETS
Money Markets
System liquidity remained positive for most of the week but turned negative by the end of the week. As a result, the Open Repo Rate (OPR) and the Overnight Rate (O/N) increased by 778 bps and 791 bps to 33.39% and 33.97% respectively, compared to the previous week.
Outlook: We expect system liquidity to stay frail next week, in the absence of any major inflow.
Treasury Bills
The treasury bills market started the week with a bearish sentiment but turned bullish in the second half.
During the week, the DMO offered around ₦216.09 billion and received bids totalling 2.25 times the amount offered. The stop rates for the 91-Day and 182-Day papers stayed unchanged at 18.50% and 19.50% respectively, while the stop rate for the 364-Day paper decreased by 21.1 bps to 21.8890% compared to the previous stop rates.
Overall, the average mid-rate decreased by 72 bps week-on-week to settle at 21.54%.
Outlook: We expect a bearish bias next week.
FGN Bonds
The local FGN bond market started slightly bearish but closed the week on a bullish note, following a late rally on May 2033 papers. Consequently, the average mid-yield decreased by 6 bps to 19.57% on a week-on-week basis.
Outlook: We expect a mixed bias next week. The DMO rescheduled the FGN bond auction earlier scheduled for August 12 to August 19.
Equities
The Nigerian stock market closed the week on a bullish note, as the ALL-Share Index gained 0.87% week-on-week, reaching a closing figure of 98,592.712 points. The year-to-date return stood at 31.85%, and the market capitalization closed the week at ₦55.98 trillion.
Outlook: We expect the mixed sentiment to persist.
Foreign Exchange
The Naira appreciated against the USD by 2.65% week-on-week, reaching $1,574.20/₦. Additionally, the CBN sold $876.26 million at the retail Dutch Auction (rDAS) at an exchange rate of ₦1,495 per dollar to 26 dealer banks. Meanwhile, total bids were valued at $1.18 billion across 32 authorized dealer banks.
Outlook: We expect volatility to persist next week.
Eurobonds
The Eurobonds market experienced significant selloffs across the curve at the beginning of the week due to global headwinds. However, the sentiment turned bullish following the release of the stronger-than-expected ISM Services PMI, which came in at 51.40 (Est. 51.1), up from 48.8. Overall, the market settled slightly bullish, with the average mid-yield closing marginally higher week-on-week by 1bp to reach 10.38%.
Outlook: We expect attention to be skewed towards the US CPI data next week.
Commodities
Crude oil ended the week on a moderately bullish note as recession fears eased and the risk of a wider war in the Middle East, which could disrupt production and transportation, loomed over the market. Brent oil increased by 3.58% to $79.56 per barrel, while WTI gained 0.48% to $76.68 per barrel. In contrast, the price of gold fell by 0.07% to $2,468.00 per ounce.
Outlook: We expect a mixed trend next week.
