Nigeria_Fixed Income Daily: Bond yields trend lower at week close
Market commentary
Amidst persistent tight system liquidity, Interbank Call rate climbed further, up 783bps to 36.33%. At the FX interbank market, the naira depreciated N1.76 to close the week at N308.69.
The T-bills market turned bearish today amidst profit-taking by investors as yields climbed 35bps on average. Selling momentum was particularly strong on the short-dated maturities as yields on the 34DTM (+202bps) and 41DTM (+216bps) bills rose to 17.18% and 17.47% respectively. In contrast, the bond market was markedly bullish as offshore inflows pushed down yields on on-the-run bonds 11bps on average. In particular, yield on the 12.50% FGN JAN 2026 bond, which had initially settled at 15.54% at Wednesday’s bond auction, shed 16bps today to close at 15.33% amidst strong demand.
Notwithstanding the strong buying momentum in the bond space, we anticipate a more cautious trading session at the start of next week as the CBN Monetary Policy Committee convenes for their September meeting.
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