Analysts anticipate squeeze in liquidity to pressure treasury bills’ yield
Oluwaseun Afolabi is Businessamlive Reporter.
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Analysts say treasury bills rate would be pressured this week on anticipated squeeze in liquidity this week. This is just as the market closed bearish last week, thanks to strong liquidity-driven demand.
“Yields are expected to be pressured, due to anticipated squeeze in liquidity position. We expect the CBN to rollover N136.31 billion worth of treasury bills maturities via primary auction in the week,” analysts at Cordros Capital said.
However, the Q4 2018 offer calendar is yet to be released.
The treasury bills market opened last week on a bullish note; however, there was a reversal in the bullish sentiment as CBN raised the stop rate of the long-tenured bill by 35 basis points to 12.20 percent from 12.15 percent in the previous week. Consequently, there was a reversal in bullish sentiments, leading rates to close the week at 12.36 percent, a 15 basis point week-on-week expansion.
Sell pressure was concentrated at the short (+52 bps) end of the curve, amid selloffs of the 48DTM (+124 bps) bill. Conversely, yields contracted at the mid (-3 bps) and long (-30 bps) segments, driven by demand for the 139DTM (-10 bps) and 314DTM (-75 bps) bills respectively.