Coronation Fixed Income and Exchange Rate Update

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March 13, 2024/Coronation Research


  • Opening market liquidity was reported at N2.6trn on Friday (08, March ‘24). Call, overnight, and repo rates closed within a range of 10% – 31% as rates in the money market tightened. Our expectation in the current week is that money market rates moderate as the inflow from the FGN bond maturity, coupon payments and NTB maturity would likely outweigh the outflow from the NTB auction.
  • Last week, the average NTB yield increased by +160bps to close at 18.8% w/w. At the latest primary market NTB auction held last week Wednesday, the CBN offered N337.8bn, but allotted N1.3trn worth of NTBs to market participants. The stop rates increased across the three tenors; 91-day: 17.2% (previously 17.0%), 182-day: 18.0% (previously 17.5%), 364-day: 21.49% (previously 19.0% y/y).
  • The average yield for OMO bills increased by +90bps to close at 18.8% w/w.
  • As for the secondary market for FGN bonds, the average yield increased by +70bps to close at 18.0% w/w.
  • In the Eurobond market, the average yield decreased by -20bps to close at 9.7% w/w.
  • The UK Manufacturing PMI increased slightly to 47.5 in February ’24 from 47.0 recorded in January ’24. This reading marks the highest since May ’23. Nevertheless, the reading still suggests a deterioration in the health of the manufacturing sector, partly attributable to weakened demand and declining factory activities amid the ongoing crisis in the Red Sea. The service PMI slowed to 53.8 in February ’24 from 54.3 in January  ’24. Overall, composite PMI rose marginally to 53.0 in February ’24 from 52.9 in February  ’24.
  • US Manufacturing PMI increased to 52.2 in February ’24 from 50.7 in January ’24. This reading marks the fastest expansion in the manufacturing activity since May ’22 and can be largely attributed to improved factory activities. The service PMI increased to 52.3 in February ’24 from 52.5 in January ’24.  Overall, composite PMI increased by 52.5 in February ’24 from 52.0 in January ’24.

For the full Coronation fixed income and exchange rate (CFEX) update, please click here

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