October 9, 2024/Coronation Research

Summary

• Market liquidity closed negative at -N1.4trn on Friday (04, Oct ‘24). Call, overnight, and repo rates closed within the range of 8% – 32.8% as rates in the market tightened.
•  Last week, the average NTB yield increased by +76bps to close at 22.7% w/w.
• The average yield for OMO bills rose by +13 bps to close at 23.8% w/w. At the OMO auctions held last week, the CBN offered the sum of N500bn, but allotted N731bn worth of OMO bills to market participants. The stop rates stood at 24.32% for 362-day tenor.
• In the secondary market for FGN bonds, the average yield increased by +33bps to close at 19.1% w/w.
• Meanwhile, in the Eurobond market, the average yield increased by +6bps to close at 9.6%.
• According to Eurostat, inflation in the Eurozone decelerated to 1.8% y/y in September ’24, down from 2.2% in August ’24. This reading marks the lowest inflation rate since April ’21 and falls below the European Central Banks’s (ECB) target of 2%. The decrease was driven by a contraction in energy prices (-6% y/y in September ’24 vs -3% y/y in August ’24), and services (4.0% y/y in September ’24 vs 4.1% y/y in August ’24). In contrast, inflationary pressure persists in food alcohol, and tobacco (2.4% y/y in September ’24 vs 2.3% y/y in August ’24). Notably, the inflation rate moderated in key Eurozone economies, including Germany (1.8% y/y in September ‘24 vs 2.0% in August ‘24), France (1.5% y/y in September ’24 vs 2.2% y/y in August ‘24), Italy (0.8% y/y in September ’24 vs 1.2% y/y in August ’24), and Spain (1.7% y/y in September ’24 vs 2.4% y/y in August ’24).

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