The Money Market

The Money market traded today on a liquidity note with a shortfall of N206billion. The Federal Account Allocations Committee’s (FAAC’s) approved budgetary disbursements were finally effected today, with the portions meant for State & Local governments paid to the market estimated at about N250billion.

However, due to the late receipt of funds (after market hours), rates closed on a bullish note at about 16.00% for overnight funds and 15.00% for OBB.

Treasury Bills Market

The Treasure Bills market witnessed some intraday activities today, as demand saw yields dropping by about 0.20% on the medium and long tenored bills, with a retracement to opening levels by close of trading. The short tenored bills traded relatively flat, with about 0.10% drop mainly on the September maturities.

There will be a primary auction tomorrow, where the Central Bank is expected to issue about N135billion in Treasury bills. Yields are expected to be at current market levels.

Current Benchmark yields are;
91days – 14.20%
182 days –14.95%
364 days –15.05%

The Bonds Market

The bears took a firm grip of the bond market, right from the start of trading. With the expectation of higher yields at the auction, secondary market yields rose as high as the psychological barrier of 16.00%.

However, there was resistance on the short end of the curve, with the 8s1 closing flat and the 7s2 shedding just about 15 kobo. The middle and long end of the curve saw an average of 50 kobo drop in prices, with the on-the-run 10-years(9s1) suffering the most price decline of about 90 kobo.

The Bond auction will hold tomorrow, where the DMO will be issuing N30biilion, N30billion and N23.94billion in the 5yr, 7yr and 10 yr papers. Yields are expected around 16.00%.

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