November 23, 2021/Coronation Research
Summary
- Opening market liquidity was reported at N105.4bn on Friday (19 Nov ‘21). Overnight and repo rates closed within a range of 19.0-20.0%. Last week, the average NTB yield declined by -8bps w/w to close at 5.1%. This can be partly attributed to increased demand on the back of improved system liquidity from an OMO maturity of N72bn. Meanwhile, the average yield for OMO bills declined by -14bps w/w to close at 5.5%. At Thursday’s primary market OMO auction, the CBN allotted N25.0bn worth of OMO bills across all three tenors and the stop rates remained unchanged from the previous auction (103-day: 7.0%, 180-day: 8.5%, 348-day: 10.1%).
- As for the secondary market for FGN bonds, the average yield rose by 7bps w/w to close at 11.4%. Last Wednesday, the DMO offered N150.0bn but allotted N225.3bn worth of instruments through re-openings of the 12.50% FGN Jan 2026 (at 11.7%), 16.24% FGN Apr 2037 (at 12.9%), and 12.98% FGN Mar 2050 (at 13.3% previously 13.2%).
- According to Eurostat, Eurozone inflation rose to a 13-year high of 4.1% y/y in October ’21 compared with 3.4% y/y recorded in September ’21. Inflationary pressure was significant in the cost of energy (23.7% y/y), services (2.1% y/y), non-energy industrial goods (2.0% y/y), as well as food, alcohol & tobacco (1.9% y/y).
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
