Global backdrop
In early January 2025, the global market was largely volatile, driven by uncertainties around President Trump's second coming and his policies. Nevertheless, post-inauguration, Trump's policy directions were clearer, and pressures on markets tapered. Consequently, US treasuries declined towards the end of the month after the sharp jump in the earlier part of January. Interestingly, the 26 executive orders signed by the President in his first day in office mostly aligned with his campaign promises. The executive orders included the imposition of a 10.0% tariff on China and 25.0% on Mexico and Canada (with a partial exemption on Canada's energy and oil export, which was earmarked to face a 10.0% tariff). However, the proposed tariffs on Mexico and Canada were eventually paused for 30 days following both countries' agreement to reinforce their border securities.
Local fixed-income market
System liquidity was robust in January 2025, as inflows from maturities, coupon payments, and FAAC totalled N3.07 trillion. This buoyant liquidity fueled strong buying interest at the short end of the curve and prompted banks to net deposit N236.16 billion at the CBN deposit discount window. The DMO took advantage of the elevated liquidity to borrow more than initially estimated at the NTB market, resulting in lower stop rates despite the net issuance of N959.53 billion in the review month.
