July 20, 2022/Coronation Research
Summary
- Opening market liquidity was reported at N39.4bn on Friday (15 July ‘22). Overnight and repo rates closed within a range of 13 – 15%. The average NTB yield increased by +9bps w/w to close at 6.9%. At the latest primary market NTB auction held last week Wednesday, the CBN offered and allotted N143.3bn worth of NTBs to market participants. The stop rates changed across the three tenors 91-day: 2.75% (previously 2.4%), 182-day: 4.0% (previously 3.79%), 364-day: 7.0% (previously 6.07%). Meanwhile, the average yield for OMO bills increased by +105bps w/w to close at 7.4%.
- As for the secondary market for FGN bonds, the average yield increased by +19bps w/w to close at 11.5%.
- At the Eurobond market, average yield for the sovereigns increased by +180bps w/w to 14.9%.
- Based on data from China’s Bureau of Statistics, the economy grew by 0.4% y/y in Q2 ’22 compared with 7.9% y/y recorded in Q2’ 21. This is the softest expansion since the contraction recorded in Q1 ’20, reflecting the impact of COVID-19 lockdowns on economic activities in Q2 ‘22. Looking ahead, renewed COVID infections, potential stagflation in the global economy and global monetary policy tightening pose downside risks to China’s growth outlook in the near term.
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
