System Liquidity
System liquidity opened the week stronger at ₦5.56 trillion, rising by ₦601.73 billion due mainly to heavy deposit money bank placements at the CBN’s Standing Deposit Facility. Despite this surplus, the Nigerian Overnight Financing Rate held steady at 22.0%. Looking ahead, funding rates are expected to ease slightly as ₦2.71 trillion from an NGOMOB maturity flows into the system.
Treasury Bills
The Treasury bills secondary market traded quietly but with a bullish undertone as investors selectively sought attractive yields ahead of the upcoming NTB auction. Strong demand at the short end pushed yields lower, while some mid-tenor maturities experienced mild sell pressure. Overall, the average yield declined by 4.4bps to 16.02%. Future activity is expected to be driven largely by liquidity conditions and positioning ahead of the auction.
FGN Bonds
The FGN bond market traded quietly with mixed yield movements as investors remained cautious and selectively active. Short-term bonds saw slight sell pressure with yields rising, while the mid-segment experienced mild demand and the long end remained mostly stable. Overall, the benchmark yield held steady at 15.77%. In the near term, the market is expected to remain cautious as investors digest recent bond auction outcomes and reassess yield direction.
Eurobonds
Nigeria’s Eurobond market started the week positively, supported by rising oil prices driven by supply concerns linked to tensions around the Strait of Hormuz. However, higher U.S. Treasury yields and a strong dollar continued to limit broader emerging market sentiment. The yield curve improved overall, especially in the mid-tenor bonds, leading to a 2bps decline in the average benchmark yield to 6.84%. Going forward, volatility is expected due to U.S.–Iran tensions, though high oil prices should continue to provide some support.
Nigerian Equities
The equities market extended its rally as the All-Share Index rose by 0.36%, pushing year-to-date returns to 56.26%. Market breadth was positive, with more gainers than losers, and banking stocks drove most trading activity. Consumer goods and industrial stocks also recorded strong gains, while the oil and gas sector declined. However, total market turnover dropped significantly, indicating weaker trading activity. Positive sentiment is expected to continue in the near term, supported by ongoing earnings releases.
Foreign Exchange
The naira appreciated for a second consecutive session, strengthening to ₦1,365.25/$ due to improved FX demand for the local currency and continued CBN intervention. Despite this, external reserves declined slightly to $48.35 billion, reflecting ongoing support for the currency. In the near term, the naira is expected to remain relatively firm, supported by interventions and FX demand-supply dynamics.
Commodities
Oil prices surged sharply after Iran escalated military actions in the Strait of Hormuz, pushing Brent above $114 per barrel and WTI above $105. In contrast, gold prices fell about 2% as a stronger U.S. dollar and persistent inflation concerns reduced its appeal. Oil prices are expected to remain elevated and volatile due to ongoing geopolitical risks.
