September 11, 2023/Coronation Research
Summary
- Opening market liquidity was reported at -N73.4bn on Friday (08 September ‘23). Call, overnight, and repo rates closed within a range of 4% – 19% as rates in the money market tightened. This week, we expect rates in the money market to remain elevated as the projected outflow from an FGN bond auction is expected to outweigh inflow from an NTB maturity.
- The average NTB yield increased by +37bps to close at 7.9% w/w. At the latest primary market NTB auction held last week Wednesday, the CBN offered and allotted N214.7bn worth of NTBs to market participants. The stop rates changed across the three tenors; 91-day: 4.5% (previously 5.19%), 182-day: 7.00% (previously 8.00%), 364-day: 12.55% (previously 13.97% y/y).
- Meanwhile, the average yield for OMO bills decreased by -3bps w/w to close at 13.3%. As for the secondary market for FGN bonds, the average yield increased by +10bps to close at 14.2% w/w.
- In the Eurobond market, the average yield increased by +9bps to close at 11.2% w/w.
- According to S&P global, Eurozone Manufacturing PMI increased to 43.7 in August ’23 compared with 42.7 in July ’23. Nevertheless, the reading still suggests a significant deterioration in the health of the eurozone manufacturing sector. Services PMI also declined to 48.3 in August ’23 from 50.9 in July ’23. Overall, composite PMI declined to 47 from 48.6 recorded in July ’23.
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