July 7, 2022/Coronation Research
Summary
- Opening market liquidity was reported at N56.4bn on Friday (01 July ‘22). Overnight and repo rates closed within a range of 13 – 14%. The average NTB yield increased by +60bps w/w to close at 5.4%. At the latest primary market NTB auction held last week Wednesday, the CBN offered N174.1bn but allotted N197.7bn worth of NTBs to market participants, stop rates remained unchanged in two out of the three tenors; 91-day: 2.40% (previously 2.49%), 182-day: 3.79%, 364-day: 6.07%. Meanwhile, the average yield for OMO bills increased by +18bps w/w to close at 5.3%.
- As for the secondary market for FGN bonds, the average yield increased by +3bps w/w to close at 11.2%.
- At the Eurobond market, average yield decreased by -1059bps w/w to 12.9%. The decline can be attributed to the maturity of the 5.625% USD300m Jun 2022 Diaspora Bond. The yield stood at 152.7% as at 24 June ‘22.
- According to Eurostat, Eurozone inflation rose to 8.6% y/y in June ’22 compared with 8.1% y/y recorded in May ’22. The headline inflation remains well above the European Central Bank (ECB) target of 2%. Inflationary pressure was significant in energy (41.9% y/y), food, alcohol and tobacco (8.9% y/y), as well as non-energy industrial goods (4.3% y/y). At its last meeting, the ECB announced its intentions to raise key interest rates by 25bps at the July meeting to combat inflation.
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
