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Bond yield breaks support line as offshore interest grows

The Nigerian Bond market rallied by c.20bps on Friday, largely driven by renewed demand from offshore investors and the relative under supply of bonds in the market. Average bond yields consequently broke the 15 per cent support level to close at c.14.96 per cent from c.15.16 per cent previously.

Treasury Bills

The T-bills market remained slight bullish, with yields moderating marginally by c.5bps as the CBN held off on its frequent OMO auctions consequently spurring slight buying interests across the curve.

Yields are expected to remain relatively flat opening the new week, as the CBN is expected to resume with its OMO and Wholesale FX auctions.

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Money Market

Rates in the money market remained relatively unchanged from previous levels as system liquidity remained robust at N250bn positive, having accounted for outflows for Bond auction settlement and retail FX funding.

Rates are expected to inch slightly higher opening next week, as the CBN is expected to resume its OMO and wholesale FX interventions consequently tightening system liquidity.

FX Market

At the Interbank, the Naira/USD rate remained unchanged at N306.75/$ (spot) and N357.10/$ (SMIS). The NAFEX rate in the I&E window appreciated further by c.0.08% to N362.71/$. At the parallel market, the cash rate appreciated further by c.0.09% to N357.80/$, while the transfer rate remained unchanged at N365.00/$.