Weekly Market Insights: Global Trends and Local Implications
- As expected, system liquidity received support from higher maturing instruments.
- Barring any OMO auction, the system is expected to receive a strong liquidity buffer this week, with total inflows estimated at N2.10 trillion, although lower than the previous week.
- OMO maturities account for about 89% of total inflows, which is expected to elevate pressure on the naira.
- In line with our expectation last week, the naira depreciated marginally due to large maturities from OMO and FGN bond repayments.
- This week, in the absence of an OMO auction by the CBN and other autonomous inflows, the size of liquidity entering the system may continue to exert mild pressure on the naira.
- Oil prices edged higher after production at the Tengiz oilfield in Kazakhstan, one of the world’s largest, was halted due to a fire.
- Bond yields are likely to move higher as investors position ahead of the N900 billion FGN bond supply expected from the DMO this week, while treasury bill yields may ease in the absence of fresh supply.
