Coronation Fixed Income and Exchange Rate (CFEX) Update

Coronation Fixed Income and Exchange Rate (CFEX) Update

Opening market liquidity was reported at N200.6bn on Friday (15 Oct ‘21). Overnight and repo rates closed within a range of 15.0-20.0%. Last week, the average NTB yield decreased by 7bps w/w to close at 5.2%.

This was due to the improved system liquidity and increased demand in the secondary market as investors filled unmet demand from Wednesday’s NTB primary market auction. The CBN offered N121.7bn and allotted NGN187.2bn worth of NTBs to market participants. The stop rates across two of the three tenors were unchanged; 91-day: 2.5%, 182-day: 3.5%, and 364-day: 7.3% (previously 7.5%). Meanwhile, the average yield for OMO bills remained unchanged w/w to close at 6.5%.

As for the secondary market for FGN bonds, the average yield decreased by 1bps w/w to close at 11.3%. We suspect that investors focused largely on corporate instruments last week, given the upcoming FGN bond auction this week.

According to the U.S Bureau of Labour Statistics, headline inflation in the United States rose to 5.4% y/y in September from 5.3% reported in August. Inflation rose 0.4% m/m in September compared to 0.3% recorded in August.


Inflation remains above the Federal Reserve’s target of 2.0%, driven by pent-up demand following the ease of COVID-19 restrictions, supply chain disruptions on raw materials and the global energy crisis.


According to China’s National Bureau of Statistics, China’s consumer price index (CPI) declined to 0.7% y/y in September, after a 0.8% y/y rise in August. The slowdown in China’s headline inflation is partly driven by a decline in food prices, which declined by 5.2% y/y in September, compared with 4.1% recorded in July. The price of pork, a staple meat in China, slumped by 46.9% y/y in September compared with 44.9% y/y recorded in August.