By Grateful Ogunjebe
The Nigerian fixed income market experienced mixed activity as treasury bills, quasi-money open market operations (QMO) instruments, and federal government bonds posted divergent yield movements, reflecting investor caution ahead of anticipated monetary policy signals from the Central Bank of Nigeria.
Market data from the FMRD Securities Exchange for July 17, 2025, showed that while short-term rates edged marginally lower across several maturities, the yield curve for bonds and quasi-money instruments witnessed slight upward shifts.
Analysts suggest this trend underscores investor repositioning in response to tighter system liquidity and uncertainties around forthcoming interest rate decisions.
In the treasury bills segment, most yields softened despite elevated money market rates.
The 7-May-2025 NTB closed at a yield of 16.59 percent, shedding 0.98 percentage points, while the 6-Sep-2025 paper dipped to 16.69 percent, down by 1.13 percentage points.
Similarly, the longer-tenor 8-Feb-2026 and 8-May-2026 bills saw yields decline to 18.60 percent and 18.87 percent respectively.
Conversely, yields on select QMO instruments, typically deployed to mop up excess liquidity, remained elevated.
The 3-Sep-2025 QMO security settled at 25.69 percent, while the 4-Nov-2025 and 2-Dec-2025 notes closed at 26.49 percent and 25.56 percent respectively, even as marginal declines in offer rates were recorded across the board.
Bonds continued to attract cautious trading interest, with prices firming slightly on moderate demand.
The 12.58E17MJ4A2027 instrument was priced at ₦99.08 with a yield of 16.89 percent, up 0.30 percentage points, while the 13.98E24H8A2028 bond rose to ₦94.42, pushing yields to 16.77 percent.
The 14.93E06MJ4A2029 bond closed at ₦95.40 with a yield of 17.00 percent, as investors sought clarity on future government borrowing plans.
In the money market, overnight (OVN) and open repo (OPR) rates eased slightly to 22.67 percent and 23.23 percent respectively, suggesting improved liquidity following recent CBN interventions.
Market participants are, however, closely monitoring the timing and size of the next round of open market operations, which could recalibrate short-term funding rates.
Bond futures also reflected stability across various tenors. The 3-month, 6-month, and 12-month Federal Government of Nigeria bond futures were quoted at settlement prices of ₦107.18, ₦111.12, and ₦107.79 respectively.
With the next Monetary Policy Committee meeting approaching, analysts believe the fixed income market is likely to remain range-bound, driven by inflation outlook, fiscal borrowing patterns, and domestic liquidity dynamics.
While yields remain attractive on a real return basis, sustained uncertainty over monetary tightening could weigh on fresh inflows into long-dated assets.