FBNQuest FI-FX Daily Watch 21 September 2017
Opening market liquidity yesterday was estimated at -N45bn (negative) and interbank rates traded between 9% to 11% levels. At an NTB primary market auction on Wednesday, the CBN raised N216bn from the sale of the 91-day, 182-day and 364-day maturities. Stop rates declined to 13.15%, 16.80% and 17.00% respectively. The latter bill was five times oversubscribed. On the secondary market for NTBs, yields narrowed at the long-end of the curve.
On the FGN bond market, yields dipped in (correct) anticipation of the stop rate for the 364-day NTB declining at auction. As for the Eurobond market, yields picked up across the curve.
The CBN’s daily fx intervention was again US$0.5m, at N305.35. Turnover on NAFEX increased from US$103m on Tuesday to US$186m. Indicative rates ranged from N317.5 to N362.5. The FOMC yesterday left its benchmark rate unchanged but signaled a rate hike in December (and three more in 2018). It is to start its balance sheet reduction next month.