FRI AUG 21 2026-theGBJournal| The Nigerian fixed-income market traded with a broadly bullish bias on Thursday, as demand for selected Treasury bills and Federal Government bonds (FGN Bonds) pushed benchmark yields lower, even as the Eurobond market faced renewed pressure from rising US Treasury yields.
In the Treasury bills secondary market, activity remained subdued but leaned bullish, with the average yield declining by 1 basis point (bp) to 18.6%.
The downward move was broadly distributed across the curve, with average yields falling by 1bp across the short-, mid- and long-term segments.
Demand was concentrated in the 91-day-to-maturity (DTM) bill, whose yield declined by 1bp, while the 175-DTM and 273-DTM bills also recorded yield compression of 1bp and 28bps, respectively.
The sharper decline at the longer end of the Treasury-bill curve reflected stronger buying interest in the 273-DTM instrument, reinforcing the bullish tone despite relatively thin market activity.
Meanwhile, the Open Market Operations (OMO) bill market recorded a stronger rally, with the average yield contracting by 11bps to 20.9%.
The move suggests improved demand for OMO instruments as investors continued to reposition across the short-term fixed-income space.
FGN Bonds Rally on Demand for Benchmark Securities
The bullish sentiment extended to the Federal Government of Nigeria (FGN) bond secondary market, where the average yield declined by 2bps to 16.6%.
Across the curve, yields fell by 3bps at both the short and mid segments, supported by renewed buying interest in benchmark maturities.
The February 2031 FGN bond saw its yield decline by 7bps, while the April 2032 bond recorded a sharper 10bps contraction.
The long end of the curve, however, remained unchanged, indicating that demand was concentrated in selected short- and medium-dated securities rather than across the entire maturity spectrum.
The combination of lower Treasury-bill, OMO and FGN bond yields points to a constructive domestic fixed-income session, although investors remain sensitive to liquidity conditions, monetary-policy expectations and developments in global rates.
Nigeria Eurobond Market Faces Global Rate Headwinds
The tone was less decisive in the Nigeria Eurobond market, where investor sentiment was mixed and selling pressure emerged across the curve.
Despite the pressure, the average Eurobond yield remained unchanged at 6.94%, suggesting that the increase in global benchmark yields was largely absorbed by the market without triggering a significant deterioration in Nigeria’s external debt pricing.
The stability in average yields, however, masks a stronger move in the global rates backdrop.
The US 10-year Treasury yield rose by 6.3bps, increasing the attractiveness of US-dollar-denominated risk-free assets and putting pressure on emerging-market Eurobonds.
The rise in US Treasury yields came against the backdrop of a 2% increase in global oil prices, while earlier gains in Nigeria’s external debt market from improved Treasury liquidity support were effectively offset by the move in US rates.
For Nigerian Eurobonds, the key tension remains between improving domestic and oil-market fundamentals on one side and tighter global financial conditions on the other.
Higher US Treasury yields can raise the return investors demand from emerging-market sovereign debt, potentially limiting further gains in Nigerian Eurobonds even when domestic fundamentals remain supportive.
Overall, the session highlighted a divergence between Nigeria’s local-currency fixed-income market, which maintained a bullish tone on stronger demand for selected securities, and its hard-currency Eurobond market, where global interest-rate pressures continued to constrain sentiment.
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