September 5, 2024/Coronation Research

Summary

• Opening market liquidity was reported at N579.3bn on Friday (30, Aug ‘24). Call, overnight, and repo rates closed within the range of 7% – 20%, as rates in the money market moderated.
• Last week, the average NTB yield decreased by -111bps to close at 21.2% w/w.
• The average yield for OMO bills declined by -223bps to close at 22.9% w/w. At the OMO auctions held last week, the CBN offered the sum of N2.35trn, but allotted N1.62trn worth of OMO bills to market participants. The stop rates stood at; (92-day: 18.49%), (176-day: 19.29%), (358-day: 21.89%), and (364-day: 21.87%).
• In the secondary market for FGN bonds, the average yield decreased by -66bps to close at 18.9% w/w.
• In the Eurobond market, the average yield decreased by -40bps to close at 9.7% w/w.
• According to Eurostat, inflation in the Eurozone eased to 2.2% y/y in August ’24 from 2.6% in July ’24. This moderation can be partly attributed to a decline in energy cost (-3% y/y vs 1.2% y/y in July ‘24) and a slowdown in non-energy industrial goods (+0.4% y/y vs +0.7% y/y July ‘24). Meanwhile, Inflationary pressure persists in services (4.2% y/y vs 4% y/y in July ’24), and food, alcohol, and tobacco (2.4% y/y vs 2.3% y/y in July ’24).
• The Eurozone Manufacturing PMI was held steady at 45.8 in August ’24 for the second consecutive month. This reading is indicative of a contraction in industrial activities. Meanwhile, services PMI rose to 53.3 in August ’24 vs 51.9 recorded in July ’24. Overall, the composite PMI increased to 51.2 in August ’24 vs 50.2 in July ’24.

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