SAT OCT 11 2025-theGBJournal| The FGN bond secondary market remained bullish, with the average yield declining 29bps w/w to 16.0%.
Across the curve, the average yield declined at the short (-44bps), mid(-28bps), and long (-32bps) segments, driven by demand for the JAN-2026 (-83bps), JUL-2034 (-57bps), and MAR-2036 (-6bps) bonds, respectively.
We expect demand in the FGN bond secondary market to remain strong, owing to the robust system liquidity and the recent MPR cut. We also reiterate our expectations of a cautious stance at the long end of the curve, amid persistent concerns over fiscal sustainability and heightened duration risk.
Meanwhile, the OVN rate expanded by 8bps to 25.0% as debits for the OMO PMA (N3.94 trillion) and net NTB issuance (N339.34 billion) undermined the combination of strong system liquidity at the start of the week and inflows from OMO maturities (N905.23 billion).
Given the sizeable OMO debits, the system’s net long position declined significantly to an average of N3.82 trillion (vs. N6.28 trillion in the previous week).
In the event of no mop-up activity by the CBN next week, we expect liquidity to remain sturdy, supported by N37.09 billion in FGN bond coupon inflows.
As a result, the OVN rate is likely to hold near current levels.
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