March 19, 2022/Coronation Research
Summary
- Opening market liquidity was reported at N126.5bn on Friday (11 March ‘22). Overnight and repo rates closed within a range of 4.5-7.0%. Last week, the average NTB yield increased by 1bp w/w to close at 3.4%. At last week’s primary market NTB auction, the CBN offered N94.0bn but allotted N482.9bn worth of NTBs to market participants. This was largely due to improved system liquidity on the back of OMO maturities of N110bn and NTB maturities of N94bn. The stop rates changed across the three tenors; 91-day: 1.8% (previously 2.2%), 182-day: 3.28% (previously 3.3%), 364-day: 4.1% (previously 4.4%). Meanwhile, the average yield for OMO bills increased by 61bps w/w to close at 3.9%.
- As for the secondary market for FGN bonds, the average yield declined by -17bps w/w to close at 10.4%.
- According to the U.S. Bureau of Labor Statistics, headline inflation rose to 7.9% y/y in February ‘22 compared with 7.5% y/y recorded in January ’22. Inflationary pressure was significant in the prices of gasoline (38.0% y/y), used cars & trucks (41.2% y/y), food (7.9% y/y) and shelter (4.7% y/y).
- According to China’s National Bureau of Statistics, headline inflation in February ’22 stood at 0.9% y/y unchanged from the previous month. Inflationary pressure eased in food prices (3.9% y/y) but was significant in the prices of transportation & communication (5.5% y/y), clothing (0.6% y/y) and household goods & services (2.5% y/y).
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
