SAT, SEPT 02 2023-theGBJournal |Following the improvement in system liquidity this week due to the FAAC inflow, interbank rates experienced a significant decline. WoW, the Open Buy Back (OBB) rate and the Overnight (OVN) rate dipped 2258bps and 2278bps to print at 1.67% and 2.42%, consecutively.
We expect interbank rates to hover around current levels.
Treasury Bills
The Treasury Bills Market witnessed an active session this week with persistent demand observed on the 22-Aug-24 bill with trades executed at 11.60%.
The NTB calendar for the fourth quarter was also released. Week-on-week analysis indicates a 54bps decline in the average benchmark yields, printing at 7.06%.
We expect a calm session as market participants shift their focus to the NTB auction slated for Wednesday.
FGN Bond Market
The FGN local bond market traded on a calm note with a bullish undertone. The minimal demand that trickled into the market was skewed to the 27s, 28s, 29s and 53s offered at 13.00%, 13.55%, 13.95% and 15.85%, respectively. Week-on-week, the average benchmark yields advanced 5bps, settling at 14.20%.
We expect a calm start to the week.
Eurobond Market
The FGN Eurobond market traded on a mixed note this week. For context, it displayed a subdued posture at the start of the week as foreign counterparties observed the summer bank holiday after which the market exhibited bullish sentiments as the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed the number of job openings fell to 8.827 million in July from 9.582 million in June while analysts were expecting July numbers to print at 9.465 million.
This sentiment was reversed despite the United States GDP which printed lower at 2.1% against the 2.4% expectation by Analysts and the delay in the disbursement of the Afrexim loan.
On the final trading day of the week, the bulls won as the Nonfarm Payroll data showed that 187K jobs were added against the 170K expectation with unemployment rate rising to 3.8%. Furthermore, the average benchmark yields rose 10bps week-on-week, settling at 11.03%.
We expect the market to be swayed by the Factory Orders and ISM Services PMI data.
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