SAT FEB 14 2026-theGBJournal| Nigerian treasury yields was volatile on Friday ahead f the January consumer inflation report which is projected to come marginally higher amid Post-festive demand spill-overs and persistent cost pressures.
The Treasury bills secondary market was bullish this week driven by the strong system liquidity. Accordingly, the average yield across all instruments declined by 34bps to 19.3%. Across segments, average NTB yields declined by 7bps to 17.6%, while average OMO yields declined sharply by 61bps to 21.2%.
Next week, we expect robust system liquidity to drive demand for bills, causing yields to decline. However, this could be undermined by the NTB auction scheduled to be held next Wednesday (February 18), where the anticipation of high supply could lead to selloffs in the secondary market.
The FGN bond secondary market was volatile this week, driven by demand from offshore investors, profit taking activities from market participants, and traders reopening short positions.
Overall, average FGN bond yields decreased by 7bps to 16.1%. Across the curve, the average yield decreased at the short (-73bps) and mid (-35bps) segments, driven by demand for the FEB-2031(-94bps) and APR-2032 (-88bps) bonds, respectively, while it closed flat at the long end.
Over the medium to long term, FGN bond yields are expected to pare, driven by the expectations of a dovish policy tilt and ample system liquidity.
The OVN rate declined by 2bps to 22.8%, buoyed by inflows from OMO maturities (N993.00 billion). Consequently, average system liquidity settled higher, closing at an average net long position of N3.64 trillion (prior week: N2.03 trillion).
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