THERE are expectations of bearish activities in the money market as the Central Bank of Nigeria (CBN) is expected to rollover a total N177.12 billion maturing treasury bills across the 91-day, 182-day and 364-day tenors at the next primary market auction this week.
In the new week, dealers also expect local Over the Counter (OTC) bond prices to trade muted as the market seek for trigger for the bullish sentiment in the midst of an expected strain in financial system liquidity.
System liquidity recovered to a positive terrain last week following the coupon payments and other significant inflows. Hence, interbank rates dipped, with Open Repo Rate (OPR) and Overnight Rate settling at 2.58percent and 3.30percent, respectively.
The treasury bill market traded mixed last week with the robust liquidity inducing buying interests while inflation expectations sponsored selloffs at the long end of the curve. Nevertheless, the market retained the bearish zone, with the average benchmark yield rising by 626 basis points (bps( to 7.81percent .
The Open Market Operation (OMO) bills yield increased by 98bps week-on-week to 13.41percent.
Surprisingly, the FGN bond market had demand at the short and long end of the curve despite the elevated inflation and debt figures released previous week.
This demand concealed the mid-paper selloffs, keeping the average benchmark yield flat week-on-week at 14.65percent.
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