June 25, 2024/Coronation Research

Summary

• Opening market liquidity was reported at N712.1bn on Friday (21, June ‘24). Call, overnight, and repo rates closed within the range of 5% – 26%, as rates in the money market moderated.
• Last week, the average NTB yield increased by +6bps to close at 22% w/w.
• The average yield for OMO bills declined by -7bps to close at 21.7% w/w.
• Meanwhile, in the secondary market for FGN bonds, the average yield increased by +1bps to close at 18.8% w/w.
• In the Eurobond market, the average yield increased by +6bps at 10.3% w/w.
• According to the Office of National Statistics, UK headline inflation moderated to 2% y/y in May ’24 vs 2.3% y/y recorded in April ’24. Notably, this marks a return to the Bank of England’s 2% target and the lowest inflation rate since July ’21. This can be partly attributed to a slowdown in food prices (+1.7% y/y vs 2.9% y/y), restaurants and hotels (+5.8% y/y vs 6% y/y), and recreation and culture (+3.9% y/y vs +4.4% y/y). Meanwhile, Inflationary pressure remained in transport sector (+0.5% y/y vs +0.1% y/y).
• Last week, the Bank of England (BOE) maintained its key policy interest rate at 5.25% for the 7th consecutive month. The BOE reaffirmed its commitment to maintaining a restrictive monetary policy stance until inflation risks subside.

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