…Bearish sentiments persisted in the Treasury bonds secondary market as the average yield rose 63bps w/w to 16.1%.
…Treasury bills secondary market closed on a negative note this week as the average yield across all instruments expanded by 9bps to 16.0%.
SAT, FEB 17 2024-theGBJournal| The FGN Eurobonds market exhibited a bullish trend throughout the week, driven by the unexpected -0.80% decline in US Retail sales data, diverging from the projected -0.10% and the previous figure of 0.40%.
Interpreting this data as a potential indicator of a lower US PCE for January, the FGN Eurobonds market approached the day with caution.
Despite the release of January’s US CPI figures exceeding expectations at 3.10%, surpassing the anticipated 2.90%, albeit lower than the previous month’s 3.40%, and the US PPI data closing higher at 0.90% against the expected 0.60%, though lower than the previous result of 1.00%, the market maintained its bullish sentiment.
Consequently, the average benchmark yield experienced a 10-bps decline WoW, ending the week at 9.58%.
Meanwhile, Bearish sentiments persisted in the Treasury bonds secondary market as the average yield rose 63bps w/w to 16.1%.
Analysts attributes the week’s performance to investors exiting positions ahead of the February 2024 bonds auction and the underwhelming CPI data (January 2023 Inflation: +29.90% y/y) released by the NBS on Thursday.
Across the benchmark curve, the average yield expanded at the short (+86bps), mid (+69bps) and long (+66bps) segments, following sell-offs of the JAN-2026 (+257bps), JUN-2033 (+125bps) and APR-2049 (+187bps) bonds, respectively.
The outcome of this month’s FGN bond auction holding on Monday (19 February) is expected to influence the direction of yields in the secondary market in the coming week.
At the auction, the DMO is offering instruments worth N2.5 trillion through new issuances of the FGN FEB 2031 (7-year) and FGN FEB 2034 (10-year) bonds.
Meanwhile, activities in the Treasury bills secondary market closed on a negative note this week as the average yield across all instruments expanded by 9bps to 16.0%.
Nonetheless, we note that sentiments were bullish for most of the week as market players cherry-picked instruments with attractive yield across the spectrum.
Across the market segments, the average yield advanced by 12bps to 15.5% in the T-bills segment but declined by 10bps to 17.8% in the OMO secondary market.
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