Yields on Nigerian Treasury bills and Open Market Operation (OMO) instruments advanced in the secondary market following broad-based sell pressure across short-, mid-, and long-dated maturities.
The upward movement in yields reflected portfolio rebalancing by institutional investors, who trimmed positions amid evolving macroeconomic signals and repositioned across equities and currency markets.
Despite elevated system liquidity, asset managers and pension funds reduced exposure to fixed income securities, suggesting tactical adjustments to optimise structured portfolios.
System liquidity moderated to ₦2.67 trillion long, down from ₦3.52 trillion in the previous session, largely due to ₦1.11 trillion debited from the system following the recent OMO auction.
Consequently, the overnight (O/N) funding rate rose by 10 basis points to close at 22.25 per cent from 22.15 per cent, while the Open Repo (OPR) rate held steady at 22.00 per cent.
Market participants indicated that fixed income traders trimmed holdings after the recent monetary policy rate adjustment, anticipating a potential repricing of spot rates at the upcoming Treasury bills auction.
In the secondary market, selling pressure was concentrated in the belly and long end of the yield curve. Risk-off sentiment pushed the average benchmark yield higher by 2 basis points to 17.19 per cent.
The OMO bills market closed on a bearish note, with the average benchmark yield expanding sharply by 58 basis points to 20.31 per cent. The spike was driven primarily by sell-offs in the 160-day-to-maturity bills, which rose by 100 basis points, and the 132-day-to-maturity bills, which climbed by 79 basis points.
Analysts note that the evolving dynamics across equities, foreign exchange and fixed income markets highlight continued strategic repositioning by investors seeking optimal returns in a volatile environment.
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