Culled—Proshare

November 17, 2017/@ZedcrestCapital

The Bond Market

The bond market ended the week on a bullish note, with renewed demand from local market players taking yields lower by 5bps across the curve. Average bond yields consequently declined to 14.83% from 14.89% in the previous session. We expect yields to trend lower opening next week, as market players anticipate release of Q3 GDP figures and outcome of the MPC meeting.  

Source: Zedcrest Dealing Desk

Treasury Bills
The T-bills market was slightly bearish, with slight sell on some short and medium tenured bills, as some banks tried to generate liquidity to fund for their retail FX bids. Average T-bill yields consequently rose slightly by 9bps to 17.98%. We expect yields to trend slightly higher opening next week, with market liquidity expected to get  tighter on further OMO and FX sales by the CBN. 

Source: Zedcrest Dealing Desk  

The CBN sold a total of N121million (97-day) and N65.90billion (216-day) bills at its OMO auction today, with rates maintained at 16% and 17.80% respectively.
 

Source: CBN 

The Money Market

The OBB and OVN rates spiked to 26.67% and 27.67% from 7% levels in the previous session. This was on the backdrop of the OMO T-bill and retail SMIS by the CBN. Market liquidity is consequently estimated to close at N101bn negative, from a positive opening figure of N165billion. We expect rates to trend higher on Monday, due to expected OMO and wholesale SMIS by the CBN.

Source: FMDQ, Zedcrest Research

The FX Market
The CBN Official spot rate remained stable at its previous day rate of N305.95/$. Its external reserves is also recorded to have improved by 2.04% to $34.33billion as at 15^th of November 2017. Rates at the Investors and exporters FX window depreciated to N360.40/$ from N359.56/$ in the previous session. The parallel market however remained stable at its previous day rate of N362.50/$. 

Source: CBN, FMDQ, REXEL BDC