Money Market
Interbank liquidity worsened today, sinking deeper into negative territory. As a result, interbank rates edged higher, with the Overnight Policy Rate (OPR) and Overnight Rate (O/N) increasing by 8 bps to 32.33% and 32.75%, respectively.
Outlook: We expect interbank rates to stay elevated, as tomorrow’s NTB auction net settlement will push system liquidity further into negative territory.
Treasury Bills
The Treasury Bills market saw subdued activity as investors focused on the NTB auction, where the DMO offered ₦550 billion across 91-day, 182-day, and 364-day tenors, with ₦162.17 billion maturing. Some interest emerged on the short- to mid-dated bills, as players sought to capitalize on current levels, though matching offers were absent. At the long end, improved offers appeared but lacked corresponding bids. The session closed with limited trades executed, and the average mid-rate for benchmark NTB papers fell by 14 bps to 18.01%.
Outlook: We anticipate the auction results will influence market activity tomorrow.
FGN Bonds
The local bonds market saw a quiet session, with limited activity concentrated around the mid-segment of the curve. Improved offers emerged, particularly on the new Apr 2029s, Feb 2031s, and May 2033s, which were the day’s most active bonds. However, few trades were finalized due to wide bid-offer spreads, leaving yields unchanged. By the close, the average mid-yield stood at 18.27%.
Outlook: We expect the market will maintain a mixed tone tomorrow.
Eurobonds
The Eurobond market saw mixed trading as tariff concerns fueled volatility. African bonds trimmed gains after President Trump threatened further trade escalations, heightening fears of a global trade war. Despite a brief dip in yields following softer-than-expected inflation data (CPI 2.8% vs. 2.90% est.), uncertainty around tariffs and rising price pressures kept markets on edge. With tariffs likely pushing up costs for goods, consumer resilience and economic stability face growing challenges. Nigerian Eurobonds ended with an average mid-yield of 9.27%, with Angola bonds being among the best performing on the day.
Outlook: In the near term, we anticipate the current cautious mood to continue.
Nigerian Equities
The Nigerian equities market closed in the red as the All-Share Index (ASI) dipped by 7bps, bringing YTD returns to 3.07%. Market sentiment remained bearish, with 32 stocks declining against 19 gainers. TANTALIZER (+9.79%) led the advancers, while CONOIL (-10%) topped the laggards. SOVRENINS dominated activity with 989.73m units traded, while MTNN led in value with N2.69b.Sectoral performance was mixed. The NGX Banking Index gained 25bps, buoyed by GTCO (+2.84%) and FIDELITYBK (+0.59%), while UBA (-1.6%) and FCMB (-3.03%) dragged. The NGX Consumer Index fell 23bps on DANGSUGAR (-3%). The NGX Oil & Gas Index declined 56bps, pressured by CONOIL (-10%). The NGX Industrial Index closed flat. Value traded rose 29.57% to $6.65m, largely driven by block trades, including 5m MTNN at N245.00 and 980m SOVRENINS between N0.99-N1.00. Market sentiment remained mixed but turned bearish towards the close.
Outlook: We expect to see mixed sentiments in the market tomorrow.
Foreign Exchange
The NFEM faced increased demand pressure today, even as the CBN sold $59.7 million within the $/₦1,532 – $/₦1,540 range. Throughout the session, the USD/NGN pair traded between $/₦1,532 and $/₦1,550, resulting in a 16-basis-point depreciation of the Naira, which closed at ₦1,538.68.
Outlook: We expect the CBN to sustain its support for the USD/NGN pair amid global headwinds.
Commodities
Oil prices climbed 2% on Wednesday after U.S. government data revealed a tighter-than-expected decline in oil and fuel inventories. However, concerns over a potential U.S. economic slowdown and tariff-related uncertainties limited gains. Brent crude futures rose $1.39, or 2%, to $70.95 a barrel by 12:52 p.m. EDT (1652 GMT), while U.S. West Texas Intermediate crude gained $1.47, or 2.2%, to $67.72. Meanwhile, gold prices advanced as uncertainty surrounding tariffs and a softer inflation report bolstered expectations for a U.S. rate cut. Spot gold was up 0.7% at $2,934.93 an ounce as of 1610 GMT, while U.S. gold futures also increased 0.7% to $2,942.50.
Outlook: Trade policy uncertainties are likely to fuel market volatility, though the global economy is anticipated to adapt. Concerns persist that tariffs may drive up costs, spur inflation, and weaken consumer confidence.
