November 16, 2021/Coronation Research
Summary
- Opening market liquidity was reported at N439.3bn on Friday (12 Nov ‘21). Overnight and repo rates closed within a range of 14.5-15.3%. Last week, the average NTB yield declined by 15bps w/w to close at 5.2%. This is due to the moderation in stop rate (by 49bps) of the 1-year NTB at last week’s primary market auction. At the primary market NTB auction, the CBN offered N150.8bn but allotted N196.2bn 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: 6.5% (previously 6.9%). Meanwhile, the average yield for OMO bills decreased by 47bps w/w to close at 5.6%.
- As for the secondary market for FGN bonds, the average yield declined by 1bp w/w to close at 11.3%.
- According to the US Bureau of Labor Statistics, headline inflation in the US rose by 6.2% y/y in Oct ‘21 compared with 5.4% y/y recorded in Sep ’21. The rise in inflation can be attributed to the ongoing global energy supply crunch, release of pent-up demand following continued ease of lockdown measures, and persistent supply chain disruptions. Inflationary pressure was significant in the prices of energy commodities (45.9% y/y), food (5.3% y/y), shelter (3.5% y/y) and new vehicles (9.8% y/y).
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
