TUE JULY 14 2026-theGBJournal| Nigeria’s fixed-income market presented a mixed picture as investors rotated into shorter-dated government securities while trimming exposure to longer-duration bonds, reflecting a cautious risk-off sentiment that has increasingly shaped trading in recent sessions.
The overnight lending rate eased by 14 basis points to 22.1%, signalling improved liquidity conditions within the banking system.
The softer funding environment supported demand in the Treasury bills market, where investors continued to favour shorter-duration instruments amid expectations that yields may have peaked.
The Treasury bills secondary market traded on a bullish note, with the average yield declining by 3 basis points to 18.4%.
The rally was concentrated at the short and long ends of the curve, where average yields fell by 5 basis points and 4 basis points, respectively.
Buying interest was strongest in the 52-day bill, whose yield declined by 27 basis points, while demand for the 360-day paper compressed yields by 17 basis points.
The mid-tenor segment, however, bucked the broader trend as the average yield inched up by 1 basis point, reflecting profit-taking on the 178-day bill, where yields rose by 19 basis points after recent gains.
Demand also strengthened in the Central Bank’s Open Market Operations (OMO) segment, with the average yield falling by 6 basis points to 21.5%, suggesting investors continued to lock in the relatively attractive returns offered by short-term instruments while limiting duration risk.
The tone was markedly different in the Federal Government bond market, where secondary market trading remained bearish.
Average bond yields climbed 2 basis points to 17.4%, underscoring continued selling pressure despite improving liquidity in the money market.
Across the benchmark curve, yields rose by 7 basis points at the short end and 1 basis point at the long end.
The move was driven largely by profit-taking in the FEB-2031 bond, whose yield jumped 15 basis points, and the JUN-2053 bond, which added 4 basis points.
The only pocket of strength was the mid-curve, where renewed demand for the JUL-2034 bond pushed its yield down by 6 basis points.
The divergence between Treasury bills and bonds suggests investors remain selective, preferring shorter-dated securities that offer attractive real returns with lower duration risk.
The cautious positioning also points to lingering uncertainty among offshore investors, who have become more sensitive to global risk appetite, exchange-rate stability and US interest-rate expectations.
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