The Open-Buy-Back (OBB) and Overnight rates (O/N) rates during the week ended 9th March 2018 declined by 100bps and 108bps to 8.50 per cent and 9.17 per cent, respectively, a development experts linked to the absence of an OMO auction.
Investors were bullish in the bond market in the last trading day of the week as yields declined across the curve.
The majority of the decrease in yields was on short dated maturity, particular the June 2019 bond with the yield down 7bps to 13.96 per cent.
Money market rates declined during the week as O/N and OBB rates fell by 83bps and 125bps to close at 9.17% and 8.50% respectively, irrespective of CBN’s selling N307billion worth of OMO bills during the week.
According to InvestmentOne, “This may not be unconnected with the improvement in system liquidity, which was largely driven by the maturity of N153bn worth of OMO bills that hit the system Thursday”
Meanwhile, the expected release by the National Bureau of Statics (NBS) inflation report for February 2018, has been tipped as the result which may point to the economic direction as the nation’s warms up for general election in 2019.
The report along developments in the United States are also tipped as major determinants of business climate and decisions for corporates and sovereigns.
The Nigerian Bureau of Statistics will release inflation report for the month of February 2018 on the 14th of March 2018. However the expected maturity of N262bn worth of OMO bills on Thursday, has been tipped as a catalyst to for projected rise in the open Buy Ban and over Night rates during the week.
The maturity experts maintained would trigger liquidity freeze as more institutions want to have a piece of the instrument Before expected release of the inflation report, the United States will on 12th of March ,2018, auction a 3-month and 6month Treasury bill, a development experts say, would also attract the interest of investment houses in Nigeria and may further impact system’s liquidity level.
Later in the week, the February inflation report for United States of America will be released on the 13th of March 2018, barely a day before that of Nigeria would be released by the NBS.
Activities in the bond market in the week ended 9th March, 2018 showed that the bond market was quiet as yields remained relatively flat.
However, the yield on the 5yr benchmark bond rose by 14bps week on week to close at 13.71 per cent.