CBN sells N157.98bn worth of OMO bills

As the three-day trading week in Nigeria comes to a close, market participants are reflecting on the events that transpired in both the fixed income and FX markets. Chukka Nwachukwu, a Fixed Income Trader at UBA, provided insights into the week's trading activities and shared his outlook for the upcoming week. The Central Bank of Nigeria (CBN) played a significant role in the market dynamics, particularly with the announcement of another OMO auction, offering over 400 billion worth of bills. This move influenced market sentiment, leading to a focus on both the long and short ends of the curve. Investors were positioning themselves strategically to navigate the implications of the auction. On the bond side, there was a general appetite for bonds, with particular interest seen in the 2028 and 2034 maturities. The T-bills market also witnessed auctions with varying interest rates, but overall, there were no significant changes observed. However, funding pressures and FX liquidity concerns added to the market's uncertainty, prompting some investors to adjust their positions ahead of the FX funding window. Looking ahead to the next trading week, Chukka anticipates continued activity in the long end of the market, particularly if the CBN maintains its OMO auctions. While bonds are expected to remain relatively quiet unless there are policy announcements, the Naira is likely to maintain its stability against the dollar, with little expectation of drastic changes in the FX market dynamics. Overall, the market is poised to carry forward the mixed sentiments of this week into the upcoming trading sessions, with investors closely monitoring CBN's actions and external factors that could influence market behavior.