FBNQuest FI-FX Daily Watch 19 September 2017
Opening market liquidity on Monday was estimated at –N36bn (negative). Interbank rates traded between 9% to 15% levels. At an OMO auction of NTBs on Monday, the CBN raised N28bn from the sale of the 80-day and 185-day maturities at stop rates of 16.00% and 17.95% respectively. On the secondary market for NTBs, the instruments we track showed a yield narrowing in the middle of the curve.
On the FGN bond market there was a selective pick-up in yields after the marked narrowing of the two previous days. The Eurobond market was particularly quiet.
The CBN’s daily fx intervention was again US$0.5m, at N305.45. Turnover on NAFEX declined from US$132m on Friday to US$125m. Indicative rates ranged from N315 to N362. The FOMC meets today and tomorrow: the market is looking for signals on rates and plans for the unwinding of the Fed’s US$4.2trn portfolio of securities. Oil prices were underpinned by a tightening of supplies from the Middle East, the relentless rise of US shale production notwithstanding.