August 11, 2022/Coronation Research
Summary
- Opening market liquidity was reported at N207.5bn on Friday (05 August ’22). Overnight and repo rates closed within a range of 14 – 16%. The average NTB yield increased by +29bps w/w to close at 7.6%. Meanwhile, the average yield for OMO bills increased by +147bps w/w to close at 11.1%.
- As for the secondary market for FGN bonds, yields trended upward at the shorter end of the curve. The average yield increased by +30bps w/w to close at 12.3%.
- At the Eurobond market, yields contracted for all sovereigns under our coverage with the average yield declining by -75bps w/w to 12%.
- According to the US Bureau of Labor Statistics, headline inflation moderated to 8.5% y/y in July ‘22 compared with 9.1% y/y recorded in June ’22. The moderation can be partly attributed to lower oil prices on the back of recession concerns in advanced economies. This decline was evident in gasoline costs (44% y/y), natural gas (30.5% y/y), and new vehicles (10.4% y/y). However, inflationary pressure persisted in food (10.9% y/y), shelter (5.7% y/y) and used cars and trucks (6.6% y/y). Meanwhile, based on data from China’s National Bureau of Statistics, headline inflation increased to 2.7% y/y in July ’22 compared with 2.5% y/y recorded in June ’22. Inflationary pressure was significant in transportation and communication (6.1% y/y), food prices (6.3%), housing (0.7% y/y) and clothing (0.7% y/y).
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