7/3/2017/InvestmentOne Research

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MONEY MARKET

· Rates remained at double-digit levels amidst pressure on system liquidity from FX auction by CBN.

· OBB and O/N ended the week at 17% and 16% levels respectively.

· In the coming week, rates are expected to remain high, given  continued squeeze  on system  liquidity via FX forward auction.

BOND MARKET

· Limited activities for better part of the week due to backlog of unsettled  trades.

· Yields contracted by an average of 2bps w/w, as demand filtered in towards the end of the week.

· Though c.N71b OMO maturity will be hitting the system, we see yields at current levels in the coming week, as CBN would keep system liquidity under control via OMO auction.

FOREIGN EXCHANGE MARKET

· NGN remained stable at the interbank market on CBN’s support.

· After initial gain following CBN’s review of FX policy, the Naira depreciated by 1.1% w/w against the USD to end the week at N465 level.

· We expect the Naira to remain pressure at the parallel market.