September 10, 2024/Coronation Research

Summary

• Market liquidity closed negative at -N276.6bn on Friday (06, Sept ‘24). Call, overnight, and repo rates closed within the range of 8.7% – 31.7%, as rates in the money market tightened.
• Last week, the average NTB yield decreased by -150bps to close at 19.7% w/w. At the latest primary market NTB auction held last week, the CBN offered and allotted N233.3bn worth of NTBs to market participants. The stop rates stood at: 91-day: 17% (previously 18.2%) 182-day: 17.5% (previously 19.2), and 364-day: 18.94% (previously 20.9%).
• The average yield for OMO bills declined by -19bps to close at 22.7% w/w.
• In the secondary market for FGN bonds, the average yield decreased by -31bps to close at 18.7% w/w.
• In the Eurobond market, the average yield increased by +20bps to close at 9.9% w/w.
• According to the National Bureau of Statistics, China’s Inflation increased to 0.6% y/y in August ’24 from 0.5% y/y in July ’24. This marks the highest inflation rate since Feb ’24, driven by domestic supply disruption amid adverse weather conditions. Food prices rose by 2.8% y/y (the highest in the last 19 months), while non-food prices rose at a softer pace (0.2% y/y in Aug ’24 vs 0.7% y/y in Jul ’24). Price increases were also witnessed in clothing (1.4% y/y in Aug ’24 vs 1.5% y/y in Jul ‘24), health (1.3% y/y in Aug ’24 vs 1.4% y/y in Jul ’24) and education (1.3% y/y in Aug ’24 vs 1.7% y/y in Jul ’24). Meanwhile, transport costs fell sharply by -2.7% y/y in Aug ’24 vs -0.6% y/y in Jul ’24.
• According to S&P Global, China’s Manufacturing PMI increased to 50.4 in Aug ’24 from 49.8 in Jul ’24, signaling a rebound in factory activities on the back of improved demand. Meanwhile, the services PMI declined to 51.6 in Aug ’24 from 52.1 in Jul ‘24. Overall, the composite PMI remained steady at 51.2 in Aug ’24.

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