The average yield on Nigerian government bonds declined in the secondary market as bullish sentiment drove strong demand for naira assets ahead of the Debt Management Office’s July auction.
Investors are positioning in local bonds on expectations of reduced supply in the third quarter, with lower spot rates at recent primary auctions reinforcing optimism. Demand has remained concentrated at the mid-to-long end of the curve.
With inflation on a consistent downward trend and the naira stabilising against the US dollar, some analysts are anticipating potential monetary policy easing despite the risk of capital outflows.
On Thursday, yields fell across key maturities, leading to a 26-basis-point drop in the average yield to 16.88%. Trading was focused on mid-term bonds, with limited transactions across the curve. Bonds maturing in May 2033 traded at 16.40%, extending their recent downward movement.
Fixed-income analysts expect cautious sentiment to persist this week, with subdued trading activity and selective interest across key tenors.
