…Overnight (OVN) rate contracted by 417bps w/w to 27.1%
SAT MAY 04 2024-theGBJournal| Proceedings in the Treasury bills secondary market closed on a bullish note driven by bargain hunting mainly at the short end of the curve amid pressures on longer-dated papers.
As a result, the average yield across all instruments declined by 7bps to 21.3%. Across the market segments, the average yield at the T-bills segment dipped by 2bps to 22.3% but contracted by 7bps to 18.7% in the OMO segment.
Following our expectation of a likely liquidity deficit next week, we anticipate a northward movement in yields in the Treasury bills secondary market as demand for instruments moderate.
In addition, the CBN is scheduled to hold an NTB PMA on Wednesday (08 May) with N179.36 billion worth of maturities on offer.
The overnight (OVN) rate contracted by 417bps w/w to 27.1%, following the inflows from FGN bond coupon payments (N53.35 billion) and OMO maturities (N42.00 billion).
The average system liquidity remained positive, closing at a net long position of N706.61 billion (vs. a net long position of N1.07 trillion from the previous week).
Barring any significant liquidity influx into the financial system next week, we envisage the OVN rate will likely notch higher amid possible debits for net NTB issuances at Wednesday’s auction.
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