FBNQuest FI-FX Daily Watch 14 May 2018

FBNQuest FI-FX Daily Watch 14 May 2018

Opening market liquidity on Thursday was N146bn (positive). Interbank rates closed within a higher range of 13% to 19% due to OMO sales. At an OMO auction yesterday, the CBN offered N250bn and raised N454bn from the sale of 119-day and 231-day paper at stop rates of 11.05% and 12.15% (a little higher than the previous week). On the secondary market, yields picked up for selected maturities.

The FGN bond market was active, and yields showed no clear direction. On the Eurobond market, there was a general dip in yields for maturities under our coverage.

The CBN’s daily fx intervention was again US$0.5m, at N305.25. Turnover at the NAFEX plunged from US$500m on Wednesday to US$182m. Indicative rates ranged from N326 to N363. The US inflation report for April was released yesterday. Headline inflation in April was 2.5% y/y while core inflation stood at 2.1% y/y. Both were a little lower than consensus. We are unlikely to see any change in the FOMC’s hawkish stance in the near future.

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