October 15, 2024/Coronation Research

Summary

• Market liquidity closed at negative N702.8bn on Friday (11, Oct ‘24). Call, overnight, and repo rates closed within the range of 5.3%—33.0% as rates moderated.
•  Last week, the average NTB yield increased by +48bps to close at 23.2 w/w. At the latest primary market NTB auction held last week, the CBN offered and allotted N81.9bn worth of NTBs to market participants. The stop rates for 91-day and 182-day tenors remained steady at 17.0% and 17.50% respectively. Meanwhile, the stop rate for the 364-day tenor decreased by 14bps to 19.86% (previously 20.0%).
• 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 marginally by +2bps to close at 19.1% w/w.
• Meanwhile, in the Eurobond market, the average yield declined by +19bps to close at 9.4%.
• According to the National Bureau of Statistics, China’s inflation eased to 0.4% y/y in September ’24 down from 0.6% in August ’24, marking the lowest inflation rate since June ’24. The moderation in inflation was partly attributed to a decrease in Non-food prices by 0.2% y/y in September ’24 vs +0.2% y/y in August ’24. The cost of transport declined further, by 4.1% y/y, in September ’24 vs 2.7% due to lower crude oil prices. Also, housing prices fell by 0.1% in September ’24. Meanwhile, food prices increased for the second consecutive month in September ’24 by 3.3% y/y vs 2.8% y/y in August ’24. It is worth highlighting that continued fiscal stimulus could ease deflationary risks in the near term.

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