December 5, 2023/Coronation Research
Summary
- Opening market liquidity was reported at N412.8bn on Friday (01 November ‘23). Call, overnight, and repo rates closed within a range of 4% – 17% as rates in the money market moderated. Our expectation in the current week is that money market rates trend upwards due to an expected NTB auction and the increased utilization of the standard deposit facility window by banks.
- Last week, the average NTB yield remained unchanged to close at 10.5% w/w. Meanwhile, the average yield for OMO bills declined by -10bps w/w to close at 14.6%.
- In the secondary market for FGN bonds, the average yield declined by -20bps to close at 15.7% w/w.
- As for the Eurobond market, the average yield declined by -20bps to close at 10.6% w/w.
- The Eurozone headline inflation moderated to 2.4% y/y in November ’23 compared with 2.9% y/y recorded in October ’23. This marks the lowest inflation reading since July ’21. The moderation was significant in service (4.0% vs 4.6%), food, alcohol, and tobacco (6.9% vs 7.4%), and non-energy industrial goods (2.9% vs 3.5%).
- According to S&P Global, China’s Manufacturing PMI rose to 50.7 in November ’23 compared with 49.5 in October ‘23. This marks the highest reading since August ‘23. The improvement can be partly attributed to better supply chain performance, amid efforts by the government to revive the sluggish economy.
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