SAT OCT 31 2026-theGBJournal| The OVN rate expanded by 2bps w/w to 20.4%, despite improved system liquidity during the week, as inflows from OMO maturities (N2.13 trillion) and net NTB maturities (N320.95 billion) exceeded outflows from OMO PMA debits (N244.93 billion).
Meanwhile, average system liquidity increased to a net long position of N8.05 trillion from N6.66 trillion in the previous week, reflecting higher average SDF balances at the Central Bank of Nigeria (CBN) amid relatively low issuance volumes at the PMAs during the week.
System liquidity is expected to remain supportive next week, underpinned by expected inflows of N2.02 trillion from OMO maturities.
However, OMO issuances could moderate system liquidity by mopping up some of the excess liquidity in the system.
The Treasury bills secondary market traded on a mixed note as the average yield across all instruments expanded by 3bps to to 20.4%.
By segment, average NTB secondary market yields contracted by 3bps to 17.9%, as unmet demand at Wednesday’s (28th October) NTB PMA filtered into the secondary market.
Meanwhile, average yields in the OMO secondary market expanded by 15bps to 18.7%, due to pockets of selling activities across the curve.
At the NTB PMA on Wednesday (28th October), the DMO offered N800.00 billion across tenors, with total demand reaching N1.91 trillion; the DMO ultimately allotted N71.16 billion.
Stop rates contracted by 10bps, 1bp and 10bps to 15.40%, 15.79% and 15.80% for the 91-, 182- and 364-day tenors, respectively.
At the OMO PMA conducted on Thursday (29th October), the CBN offered N1.00 trillion in bills, attracting N2.28 trillion in demand, and ultimately allotted NGN244.93 billion.
Stop rates settled at 17.69% and 17.63% for the 124D and 138D tenors, respectively.
In contrast, the FGN bond secondary market traded on a bearish note, with the average yield across instruments widening by 8bps to 16.4%, as limited offshore participation provided little support against sustained domestic selling pressure.
Across the benchmark curve, the average yield expanded at the short (+21bps) and long (+12bps) ends reflecting selloffs of the MAR-2027 (+48bps) and APR-2037 (+17bps) bonds, respectively, while it contracted at the mid (-4bps) segment due to demand for the MAY-2029 (-23bps) bond.
Over the medium term, the FG’s planned increase in government borrowings is likely to sustain upward pressure on bond yields.
However, the ongoing monetary easing cycle, sustained foreign portfolio inflows, and continued disinflation should moderate the pace of yield increases.
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