November 15, 2017/InvestmentOne Research
MONEY MARKET
· Money market rates declined in the outgone week as a result of improvement in system liquidity due to OMO maturity of N233bn that hit the system on Thursday.
· There will be a T-bill auction on Wednesday, where the Apex bank will auction N119bn worth of 91-day, 182-day and 364-day maturities.
· Although N142bn worth of OMO bills will be maturing on Thursday, we expect CBN to maintain its stance on squeezing system liquidity in defence of the local currency.
BOND MARKET
· Bond market was bearish last week as there were sell off on major tenors. There was significant movement on the yield of 10yr benchmark bond which increased by +18bps w/w.
· This may not be unconnected with the squeeze on system liquidity due to CBN’s OMO and FX sales restricted activities in the bond market.
· In the coming week, activities in the bond market are likely to be influenced by liquidity levels and foreign investor participation.
FOREIGN EXCHANGE MARKET
· While the NGN remained at N306 level against the USD at the interbank market due to CBN’s intervention, the NGN lost -0.10% w/w to N360.40 against the USD at the IEFX window.
· At the parallel market the NGN remained unchanged w/w at N363 against the USD, which may not be unconnected with the Apex bank’s continued FX sales.
· In the near term, we expect the NGN to remain stable due to the support from the CBN’s FX market intervention sales.
