SAT, MAR 02 2024-theGBJournal| Trading in the Treasury bonds secondary market closed bearish Friday as investors reacted to the 400bps hike in the MPR earlier in the week. As a result, the average yield advanced by 45bps to 17.3%.
Across the benchmark curve, the average yield expanded at the short (+46bps), mid (+85bps), and long (+25bps) segments due to sell-off activities on the MAR-2027 (+109bps), APR-2032 (+197bps), and JUL-2034 (+63bps) bonds, respectively.
Throughout the week, the FGN Eurobond market experienced a mix of sentiments influenced by various reports from the US.
Notably, the US GDP report for Q4 ’23 revealed a slight decrease of 0.10%, settling at 3.20%, deviating from both expectations and the previous figure of 3.30%.
Additionally, the core PC report aligned with predictions at 2.80%, surpassing the previous level of 2.90%.
Towards the week’s end, the US ISM Manufacturing PMI indicated a decline to 47.80, falling short of the expected 49.50 and the last recorded value of 49.10. Consequently, the average benchmark yield saw a week-on-week decrease of 3 bps, reaching 9.76%.
The Treasury Bills Market started the week with increased buying interest on the Feb-2025 papers.
However, following the OMO PMA results, the market turned bearish. At the auction, the CBN offered N500 billion across three maturities, with a total subscription of N1.13 trillion and total amount of N1.05 trillion.
Stop rates closed higher than previous levels at 19.00%, 19.50%, and 21.50% compared to 17.24%, 18.00%, and 19.00%. Consequently, the average benchmark yield rose by 37 bps week-over-week, settling at 17.85%.
Meanwhile, Interbank rates increased on a weekly basis, attributed to decreased market liquidity caused by various outflows such as the FX intervention payment, NNPC remittance to the CBN, and the settlement of the OMO PMA at the week’s conclusion.
Consequently, the Open Buy Back rate (OBB) and the Overnight rate (O/N) concluded at 27.16% and 28.19%, marking an increase of 225 bps and 244 bps, respectively.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
