The money market rate dropped significantly as the OVN and OBB fell to 5.93% and 5.29%

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Monday 06 May 2019 / 12:53 / Anchoria AM Research

Money Market

The money market rate fell significantly last week as the Overnight Rate (OVN) and Open Buy Back (OBB) fell to 5.93% and 5.29%, from 17.29% and 16.43% respectively. As a result, the average money market rate fell 11.25% to 5.61%. Major entries for the week included: OMO maturity of cN 62.80 billion, FAAC disbursement of cN 350 billion while major releases for the week included: weekly wholesale, invisible and PME FX auctions of 210 millions of dollars. The liquidity of the system is estimated at 250 billion cN at the end of the week.

Pending a resumption of cleaning activity this week, we expected money market rates to rise slightly.

Instrument

04/26/2019

05/03/2019

Switch

OBB

16.43%

5.29%

-11.14%

UFO

17.29%

5.93%

-11.36%

Source: Anchoria AM Research, FMDQ OTC

Forex: USD / NGN

The official CBN rate edged up 0.02% last week to close at N / $ 306.95 while the investor and exporter exchange window rate edged up 1 kobo to close at 360, 65 N / $ due to lower market turnover. rate of 42.33% on weekdays to 692 million dollars against 1.20 billion dollars the previous week. However, the Naira in the parallel market rose 0.28% to close at N / $ 361.00 (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.

04/26/2019

05/03/2019

Switch

CBN official rate

306.90

306.95

+ 0.02%

I&E FX window

360.64

360.65

+ 0.00%

Everdon BDC rate

360.00

361.00

+ 0.28%

Source: Anchoria AM Research, FMDQ OTC

Merchandise

Brent crude oil and WTI crude oil fell 1.80% and 2.15% to close at $ 70.85 and $ 61.94 per barrel respectively due to higher inventories of U.S. oil and d ‘An easing of supply concerns over speculation that Saudi Arabia and its allies would increase production to make up for any breach of expanded sanctions against Iran.

We expect traders to take into account the trade tension between China and the United States this week.

Fixed income

Obligation: FGN

The bond market closed on a slightly bullish note last week as average yields fell 2 basis points to end the week at 14.27%. We saw mixed activity across different maturities as 2034 and 2023 bonds saw a steep sell-off during the week while 2020 and 2049 bonds saw some demand.

We expect market participants to treat with caution this week as they monitor the direction of short term government instruments (Treasuries and OMOs).

Secondary market


Source: Anchoria AM Research, FMDQ OTC

Goods of treasure

The secondary treasury bill market closed on a flat note last week despite relatively strong liquidity. The average yield closed at 13.13% against 13.12% the week before. This is due to the primary market auction for treasury bills that took place during the week and as investors were anticipating the renewal of the OMO auction due to continued liquidity during the week.

Secondary market

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Source: Anchoria AM Research, FMDQ OTC

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Related news

1. Long-term bond demand under pressure Slightly lower yields

2. First FGN 30-year bond oversubscribed at April auction

3. CBN to auction c.N110bn treasury bills when break resumes

4. The average money market rate rose 6.65% to 16.86%

5. Average yield contracts at 13.1% amid purchase interest; PMA holds Thursday

6. Summary of FGN bond auction results for April 2019

7. Average yield moderates to 13.3% in the absence of OMO auctions

8. The average money market rate fell 10.72% to 10.22%

9. Invest in the FGN Monthly Bond Auction – April 2019

ten. Ecobank launches new 5-year Eurobond with 9.75% re-offer

11. FGN bond yield outlook remains relatively stable with renewed buying interest on maturities

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