TUE JUNE 30 2026-theGBJournal| Nigeria’s fixed-income market presented mixed signals on Monday, with investors increasing demand for Treasury bills while selling pressure resurfaced in the Federal Government bond market.
Treasury bill yields declined as investors sought shorter-dated securities amid ample liquidity in the banking system, while bond yields climbed following profit-taking on longer-tenor instruments.
Money market conditions also remained stable, reflected in a slight decline in interbank funding costs.
The overnight lending rate eased by five basis points to 22.2%, indicating that liquidity conditions remained comfortable and banks faced little funding pressure during the trading session.
Investor demand was strongest in the Treasury bill secondary market, where the average yield fell by three basis points to 18.6%, extending the market’s bullish momentum.
Across the yield curve, the decline was driven primarily by buying interest in short- and medium-dated instruments.
Yields at the short end fell by five basis points, supported by strong demand for the 52-day-to-maturity bill, whose yield declined by 23 basis points.
The mid-tenor segment outperformed, with average yields dropping by 10 basis points after investors accumulated the 164-day bill, driving its yield down by 25 basis points.
The long end of the Treasury bill curve, however, bucked the broader trend. Average yields edged up by one basis point as investors sold the 297-day bill, pushing its yield 35 basis points higher in a bout of profit-taking.
Activity in the Central Bank of Nigeria’s Open Market Operations (OMO) segment was weaker, with the average yield rising five basis points to 21.6%, suggesting relatively softer demand for OMO instruments compared with Treasury bills.
In contrast, the Federal Government bond secondary market ended the session on a bearish note as investors locked in gains on selected benchmark securities.
The average bond yield climbed 14 basis points to 17.3%, reflecting broad-based selling across much of the sovereign debt curve.
Selling pressure was most pronounced at the short and long ends of the curve.
Short-dated benchmark yields rose 16 basis points, led by the February 2031 bond, whose yield jumped 39 basis points. At the long end, average yields increased 22 basis points after investors sold the June 2038 bond, pushing its yield sharply higher by 186 basis points.
The mid-segment of the curve was the lone bright spot, with average yields easing by one basis point. Demand for the June 2033 bond drove its yield seven basis points lower, partially offsetting the broader rise in borrowing costs across the sovereign bond market.
The divergent performance highlights investors’ continued preference for shorter-term government securities amid cautious positioning in longer-duration bonds, as market participants assess the outlook for interest rates, inflation and monetary policy.
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