SAT APRIL 13 2024-theGBJournal|The Treasury bonds secondary market sustained its bullish sentiments from last week, as the average yield declined by 4bps to 19.3%.
Across the benchmark curve, the average yield expanded at the short (+2bps) end following sell pressures on the APR-2029 (+36bps) bond but contracted at the mid (-8bps), and long (-2bps) segments as investors showed interest in the FEB-2031 (-17bps) and JUN-2053 (-25bps) bonds, respectively.
Next week, we believe the outcome of this month’s FGN bond auction holding on Monday (15 April) will influence the sentiments in the secondary market.
At the auction, the DMO is set to offer instruments worth over NGN450.00 billion through new issuance of a FGN APR 2029 bond, and re-openings of the 18.50% FGN FEB 2031 and 19.00% FGN FEB 2034 papers.
Nonetheless, we maintain that yields in the FGN bond secondary market will remain elevated in the short term, given the anticipated monetary policy administration globally and domestically and sustained imbalance in the demand and supply dynamics.
The FGN Eurobond market witnessed profit taking activities as the Consumer Price Index data printed higher than expectations 3.5% vs 3.4% from 3.20% previously.
The week also saw the Producer Price Index data printing at 2.2% vs 2.2% from 1.6% previously. Ultimately, the bears dominated as the average benchmark yield surged by 16bps week-on-week, settling at 9.56%.
We expect the Retail Sales data to hold sway over market direction.
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