THUR MAR 26 2026-theGBJournal| Treasury bills yields edged lower by 2 basis points following the latest primary market auction, reflecting sustained demand from investors seeking short-term safety amid lingering macroeconomic uncertainty.
The modest decline signals continued liquidity in the system, as market participants tactically position in shorter-duration instruments.
The average yield contracted by 2bps to 17.8%. Across the curve, the average yield expanded at the short (+9bps) end, due to selloff of the 42DTM (+37bp) bill, but contracted at the mid (-5bps) and long (-6bps) segments, driven by demand for the 175DTM (-27bps) and 329DTM (-31bps) bills, respectively.
Similarly, the average yield contracted by 1bp to 20.4% in the OMO segment.
At Wednesday’s NTB primary market auction, the Debt Management Office (DMO) offered N400.00 billion across tenors, with total demand reaching N2.89 trillion, translating to a bid-to-offer ratio of 7.2x.
The DMO ultimately allotted N520.67 billion, implying a bid-to-cover ratio of 5.6x. Stop rates were unchanged at 15.95% for the 91-day tenor, while the 182-day and 364-day tenors declined by 20bps to 16.42% and 16.43%, respectively
Despite the bullish sentiment in the T-bills segment, the Federal Government bond (FGN Bonds) market moved in the opposite direction, with yields expanding across key maturities.
The average yield expanded by 1bp to 15.6%. Across the benchmark curve, the average yield expanded at the short (+2ps) and mid (+2bp) segments due to profit-taking activities on the FEB-2031 (+7bps) and JUN-2033 (+4bps) bonds, respectively, but closed flat at the long end.
The uptick points to renewed sell-side pressure, as investors reassess inflation expectations and adjust portfolios in response to evolving monetary policy signals.
Meanwhile, the overnight lending rate contracted by 2bps to 22.3% in the absence of any significant funding pressure on the system.
The divergence between the money and bond markets underscores a cautious investment landscape, where short-term instruments remain attractive while longer-dated securities face headwinds.
Analysts say the trend could persist in the near term, particularly as investors await clearer direction on inflation and interest rate policy.
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