System Liquidity
System liquidity remained strong, opening at a surplus of ₦6.21tn, supported mainly by CBN SDF placements and PMA repayments. Despite the MPC retaining the MPR at 26.5%, the NOFR stayed stable at 22.0%. Market expects rates to remain largely stable despite the ₦334bn bond auction settlement.
Treasury Bills
The Treasury Bills market traded quietly with a slight bearish bias as investors focused on the NTB primary auction, which attracted strong demand of ₦1.99tn. Most benchmark rates closed flat, with only the Nov-26 paper rising slightly. Market activity is expected to remain driven by liquidity levels and strong demand for the 1-year tenor.
FGN Bonds
The FGN bond market traded bearish as investors stayed cautious ahead of the NTB auction and MPC decision. Mixed performance was seen across maturities, while the 2037 paper recorded the biggest selloff. Overall benchmark yield rose by 16bps to 15.99%. Investor interest is still expected to remain in the domestic fixed income market.
Eurobonds
The Nigerian Eurobond market traded bullish as investors increased buying interest across the curve, causing yields to decline, especially at the short-to-mid segment. Average benchmark yield fell by 4bps to 7.02%. Outlook remains positive on the back of sustained demand, foreign inflows, and stable oil prices.
Nigerian Equities
The equities market closed negative with the ASI down 1.02%, although market breadth stayed positive with more gainers than losers. Losses in industrial, banking, consumer goods, and oil & gas stocks pressured the market, while selective buying persisted in some counters. We expect the Nigerian equities market to trade mixed with a cautious tone, amid profit-taking in heavyweight stocks.
Foreign Exchange
The Naira remained relatively stable at the NFEM, appreciating marginally against the dollar amid stronger FX liquidity, foreign inflows, and sustained confidence in CBN reforms. External reserves also increased to $48.72bn. Outlook for the FX market remains stable in the near term.
Commodities
Oil prices declined sharply after reports of progress in U.S.-Iran negotiations, easing supply concerns, while gold prices gained as lower Treasury yields supported safe-haven demand. Oil is expected to remain under mild downward pressure amid geopolitical volatility.
