The average money market rate rose 5.45% to 15.72%

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Monday 08 April 2019 14:18 / Anchoria AM Research

Money Market

The money market rate rose last week as the Overnight Rate (OVN) and Open Buy Back (OBB) rose to 16.14% and 15.29%, from 10.67% and 9 , 86% respectively. As a result, the average money market rate rose 5.45% to 15.72% due to the drop in system liquidity to 105 billion cN from 440.7 billion cN the previous week. , the CBN having resumed its liquidity cleaning activities during the week.

The major entries of the week included: OMO maturity of cN 80 billion, while the exits of the week included: weekly wholesale, invisible and PME FX auctions of $ 210 million, OMO sales of 526 billion cN.

We expect rates to rise slightly on Monday as banks gear up for another round of weekly CBN currency auctions on Monday.

Instrument

03/29/2019

04/05/2019

Switch

OBB

9.86%

15.29%

+ 5.43%

UFO

10.67%

16.14%

+ 5.47%

Source: Anchoria AM Research, FMDQ OTC

Forex: USD / NGN

The official CBN rate continued its uptrend last week to close at N / $ 307.00, an increase of 0.02% while the investor and exporters exchange window rate fell from 0 , 10% to close at N / $ 360.33 despite a market turnover rate reduction of 9.91% week-over-week to $ 1.09 billion from $ 1.21 billion a week former. However, the Naira on the parallel market was unchanged to close at N / $ 360.00 (using the Everdon BDC rate).

We expect parallel market rates to remain constant as the umbrella bank continues to provide foreign exchange into the market, coupled with its frequent wholesale and retail SMIS program.

03/29/2019

04/05/2019

Switch

CBN official rate

306.95

307.00

+ 0.02%

FX I&E Window

360.68

360.33

-0.10%

Everdon BDC rate

360.00

360.00

+ 0.00%

Source: Anchoria AM Research, FMDQ OTC

Merchandise

Brent crude oil and WTI crude oil rose 3.64% and 4.89% to close at $ 70.34 per barrel and $ 63.08 per barrel respectively, due to lower production from the ‘OPEC as production volume hits four-year low due to US sanction against Venezuela and Iran.

News about sanctions against Iran intensified last week when the United States announced it was reducing the number of waivers previously granted.

Fixed income

Obligation: FGN

The bond market traded on a bearish note last week as the Debt Management Office (DMO) released the second quarter bond issuance schedule. The published schedule was in line with market expectations for the issuance of new long-term bonds (30-year bond). We saw a massive selloff in longer-dated bonds, particularly 2028 and 2029 bonds. Average yields rose 23bp to end the week at 14.30%.

Secondary market

Source: Anchoria AM Research, FMDQ OTC

Goods of treasure

Despite the decrease in liquidity in the system as the CBN resumed cleaning activities last week, the secondary treasury market closed on a bullish note. As a result, the average yield fell 11 bps to end the week at 13.44%.

Last week’s treasury bill auction saw a high subscription rate across all tenors, surprisingly the spot rate rose 40bp to 12.60% for 182 days and 50bp to 12, 85% for 364 days while over 91 days the rate dropped slightly by 1bp to 10.29%.

Secondary market

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Source: Anchoria AM Research, FMDQ OTC

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