Nigerian government bonds came under pressure last week as yields climbed 12 basis points (bps) to 16.5%, driven by profit-taking and investor repositioning ahead of key inflation data expected this week.
Market watchers expect inflation to ease due to the rebasing of the Consumer Price Index (CPI), which could further influence bond yields in the medium term. Analysts at Cordros Capital noted that yields increased in the short (+24 bps) and mid (+2 bps) segments, while the long end remained flat.
The largest yield jumps came from the MAR-2027 (+33 bps) and APR-2032 (+46 bps) instruments. Early in the week, selling pressure targeted short- to mid-tenor bonds, including FGN 2029, FGN 2032, and FGN 2034. However, selective buying emerged midweek, particularly in FGN 2035s, which saw yields drop by 29 bps.
Despite intermittent rallies, market sentiment remains cautious, influenced by tight system liquidity and the Debt Management Office’s (DMO) ongoing efforts to manage borrowing costs.
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