November 1, 2021/Coronation Research

Summary

• Opening market liquidity was reported at N168.6bn on Friday (29 Oct ‘21). Overnight and repo rates closed within a range of 13.0-18.5%. Last week, the average NTB yield increased by 10bps w/w to close at 5.5%. At last week’s primary market NTB auction, the CBN offered N150bn but allotted N235.1bn worth of NTBs to market participants as it maintained the stop rates across two of the three tenors; 91-day: 2.5%, 182-day: 3.5%, 364-day: 6.9% (previously 7.25%). Meanwhile, the average yield for OMO bills decreased by 7bps w/w to close at 6.4%. 
• As for the secondary market for FGN bonds, the average yield decreased by 11bps w/w to close at 11.3%. This was due to improved system liquidity on the back of the FGN’s bond coupon payments, FAAC disbursements and OMO maturities. 
• According to the U.S Bureau of Economic Analysis, the U.S economy grew by 2.0% y/y in Q3 ‘21, after a 6.5% y/y rise in Q2 ‘21. The slowdown in growth reflects the resurgence in Delta variant-related coronavirus cases during the period. Other factors include supply chain challenges and the fading impact of government stimulus from earlier in the year.
• At its October meeting, the European Central Bank voted to keep its key interest rates unchanged and continue to conduct net asset purchases under the Pandemic Emergency Purchase Programme (PEPP) but at a moderately slower pace.