Markets’ Trends Showing Good and Bad Signs for Nigeria’s Economy

Markets’ Trends Showing Good and Bad Signs for Nigeria’s Economy

Major markets in the Nigeria closed with mixed trends on June 08, 2020, as most of the indicators maintained relatively quiet trend.

Money Markets
Interbank rates closed relatively unchanged on Monday, as system liquidity remains relatively tight. While the Open Buy Back (OBB) closed at 14.50%, the Overnight rates closed at 15.42%. System liquidity is estimated to be c.N100 billion according to sources.

Experts in Comercio Partners projected that the funding rates are likely to hover around current levels on Tuesday barring momentous flows.

Treasury Bills
The Treasury Bills market maintained its relatively quiet trend during Monday’s session, with minimal activity witnessed across board. Nevertheless, pockets of demand was seen on the mid and long end whilst the short tenor maturities closed relatively flat.

The relatively weak trend is expected to persist in the Treasury Bills market.

Also, the Bond market started the week on a relatively quiet note with minimal volumes seen across board. Nevertheless, pockets of demand was seen across board particularly on the short and long tenor maturities albeit on a less aggressive note as yields remained relatively unchanged.

Analysts expect the Bond market to maintain a similar trend on Tuesday as the bulk of the attention will be skewed towards the outcome of the Sukuk auction.

Eurobond Market
The Eurobond market maintained its bullish trajectory in Monday’s session as the OPEC+ agreement over the weekend further strengthened the bullish bias in the market. In all yields declined by 35 on average across the Nigerian curve.

Bullish bias is expected to persist on Tuesday albeit with some profit taking on the back of the sharp decline in yields.

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FX Market
At the parallel market, the Naira closed flat against the US dollar, Pound Sterling and Euro at $1/₦450, ₤1/₦545 and €1/₦473 respectively. At the Investors and Exporters’ FX Window, the local currency depreciated against the US Dollar by ₦0.83 to close at $1/₦387.33.

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