By Sofiyyah Layole
Nigeria’s fixed income landscape experienced a muted session on Tuesday, marked by a marginal dip in Treasury Bill yields and largely stagnant trading in Federal Government bonds, as investor caution dominated market sentiment.
Data sourced from the FMDQ Securities Exchange revealed that the positive momentum in short-term government debt saw yields on most Treasury Bills soften by an average of 0.01 percent. The closely watched one-year Treasury Bill, which matures in October 2026, closed the session yielding 17.81 percent, reflecting persistent appetite at the shorter end of the curve.
Similarly, yields on Open Market Operation (OMO) bills also moderated slightly, though the paper maturing on December 2, 2025, continued to offer a premium, settling at a robust 23.52 percent after a minimal 0.02 percent decline.
Activity in the long-term bonds market remained largely subdued, with yields holding unchanged across most benchmark tenors. This flatness signals that investors are maintaining a wait-and-see approach, likely anticipating clearer signals on the monetary policy front.
However, a notable exception was observed on the Federal Government bond maturing in April 2029, where the yield saw a significant upward movement, climbing 0.51 percent to close at 15.64 percent. This spike suggests a mild bout of selling pressure on that specific security, offering a slight tactical entry point for long-term buyers.
In contrast to the slight retreat in T-Bill yields, short-term money market rates tightened, pointing to an emerging liquidity strain within the banking system.
The Open Repo (OPR) rate rose to 24.80 percent from 24.50 percent, while the Overnight (O/N) lending rate also inched up, settling at 25.35 percent.
Similarly, the forward expectations for the long-term debt market held steady, with futures contracts for Federal Government bonds maintaining their value, suggesting that market participants remain confident in the current long-term pricing structure.