August 20, 2024/Coronation Research

Summary

• Opening market liquidity was reported at N32.9bn on Friday (16, Aug ‘24). Call, overnight, and repo rates closed within the range of 7.6% – 32.9%, as rates in the money market moderated.
• Last week, the average NTB yield decreased by -86bps to close at 24.9% w/w.
• The average yield for OMO bills declined by -31bps to close at 25.8% w/w.
• In the secondary market for FGN bonds, the average yield decreased by -35bps to close at 19.7% w/w.
• In the Eurobond market, the average yield decreased by -16bps to close at 10.3% w/w.
• According to the US Bureau of Labor Statistics, inflation in the U.S. moderated to 2.9% y/y in July ’24 from 3% y/y recorded in June ’24, marking the lowest rate since March ’21. The slowdown was driven by decline in inflation for shelter (+5.1% y/y vs +5.2% y/y), transportation (+8.8% y/y vs +9.4% y/y) and apparel (+0.2% y/y vs +0.8% y/y), while food inflation remained unchanged at 2.2% y/y. Meanwhile, inflationary pressure persists in energy costs (+1.1% y/y vs +1% y/y).
• According to the S&P Global, the U.S. Manufacturing PMI slowed to 49.6 in July ’24, compared with 51.7 recorded in June ’24. It is worth highlighting that this reading marks the lowest this year, reflecting contraction in business activities. The services PMI reduced to 55 in July ’24 from 55.3 in June ’24. Overall, the composite PMI declined to 54.3 in July ’24 from 54.8 in June ’24.

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