Nigeria_Fixed Income Daily: Bullish trend persists in bond space
Amidst further improvement in system liquidity (c.N55 billion), the Interbank Call rate declined 700bps to 10.33%. At the FX interbank market, the naira depreciated a further 25 kobo to close at N310.08.
Following the decision of the Monetary Policy Committee to hold interest rates at yesterday’s meeting, trading in the T-bills space was mixed albeit with a slightly bullish bias. Whilst the yields on the 36DTM (-127bps) and 232DTM (-133bps) bills moderated to 16.28% and 17.58% respectively, yield on the 78DTM (+180bps) bill advanced to 16.12%. Meanwhile, the bond market extended its bullish streak as yields on the benchmark bonds declined by 17bps on average. Demand was particular strong on the 12.50% FGN JAN 2026 and 12.40% FGN MAR 2036 bonds as their yields moderated 21bps and 19bps to both close at 14.87%.
Whilst we expect improved liquidity to support bullish sentiment, we expect overall market direction to be guided by results of today’s T-bills PMA which are yet to be released.
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