Coronation Fixed Income and Exchange Rate (CFEX) Update
| Opening market liquidity was reported at N75.1bn on Friday (25 March ‘22). Overnight and repo rates closed within a range of 5.7-9.0%. The average NTB yield declined by -7bps w/w to close at 3.2%. Meanwhile, the average yield for OMO bills remained unchanged to close at 3.6%. We note that last week, there was no OMO auction for the first time after eleven consecutive weeks of regular auctions this year. As for the secondary market for FGN bonds, the average yield increased by 16bps w/w to close at 10.7%. At last week’s primary market FGN bond auction, the DMO offered N150bn but allotted N296.4bn worth of instruments through re-openings of the 12.5% FGN Jan 2026 (10.2%, previously 10.9%) and 13.0% FGN Jan 2042 (12.7%, previously 13.0%). Demand was considerably higher (subscription hit N598.4bn). This is due to FGN coupon payments of N18.1bn and OMO maturities of N42bn. Based on data from S&P Global, the US Services PMI increased to 58.9 in March ’22 from 56.5 recorded in the previous month. This can be partly attributed to improved consumer demand. The Manufacturing PMI increased to 58.5 in March ‘22 compared to the 57.3 recorded in the previous month. Overall, the Composite PMI increased to 58.5 in March ’22 from 55.9 recorded in February. Meanwhile, the Eurozone Services PMI declined to 54.8 in March ’22 from 55.5 recorded in February. The Eurozone Manufacturing PMI declined to 57.0 in March ‘22 compared to the 58.2 recorded in the previous month. Overall, the Composite PMI declined to 54.5 in March ’22 from 55.5 recorded in February ’22. |
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