Pavline Capital Fixed Income Weekly Update
11th – 15th May, 2026
Weekly fixed income market update covering money market liquidity, treasury bills, FGN bonds, Eurobonds, foreign exchange movement, and market expectations.
Money Market
System liquidity improved during the week, supported by OMO maturity inflows and moderate interbank activity. Funding conditions remained relatively stable, although short-term rates adjusted slightly as market participants positioned ahead of auction settlements. Liquidity opened the week around ₦3.92 trillion and rose steadily before closing at ₦5.48 trillion by Friday.
The Open Repo Rate remained anchored around 22.00%, while the Overnight rate traded within a tight band of 22.10% to 22.28%. Market activity was largely driven by liquidity positioning, maturities, and expectations around the next NTB auction.
We expect liquidity to remain supportive in the near term, with funding rates guided by OMO maturities, auction settlement flows, and CBN sterilisation activity.
System Liquidity Trend This Week (₦bn)
Sources: CBN, Pavline Capital Research
Treasury Bills
The NTB secondary market traded on a mildly bullish note during the week as liquidity supported selective demand across the mid-to-long end of the curve. Buying interest was strongest around the one-year paper, while shorter maturities traded with limited movement.
Stop-rate expectations remained a key driver of investor positioning, with demand tilted toward instruments offering higher carry and better reinvestment value. Consequently, average benchmark yield declined marginally by 5bps w/w to close at 17.42%.
We expect a moderately active session, with demand likely concentrated around longer-dated NTBs while investors continue to monitor liquidity and auction pricing.
Change in NTB Yield (Week-on-Week)
Sources: FMDQ, Pavline Capital Research
T-Bills Closing Rates
| Maturity | Discount | Yield (%) | Change (%) |
|---|---|---|---|
| NTB 30-Apr-26 | 16.21 | 16.28 | -0.02 |
| NTB 28-May-26 | 15.61 | 15.86 | -0.03 |
| NTB 25-Jun-26 | 15.54 | 16.06 | -0.04 |
| NTB 23-Jul-26 | 15.63 | 16.38 | -0.05 |
| NTB 20-Aug-26 | 15.81 | 16.75 | -0.04 |
| NTB 17-Sep-26 | 15.84 | 16.98 | -0.03 |
| NTB 15-Oct-26 | 16.08 | 17.42 | -0.05 |
| NTB 12-Nov-26 | 16.13 | 17.75 | -0.06 |
| NTB 10-Dec-26 | 16.04 | 17.90 | -0.04 |
| NTB 14-Jan-27 | 16.10 | 18.32 | -0.05 |
FGN Bonds
The FGN bond secondary market traded with mixed sentiment during the week. Early sessions saw cautious demand as investors assessed inflation expectations and auction supply. However, selective buying emerged on longer-dated instruments, particularly where yields offered attractive entry levels.
Activity remained moderate overall, with the short-to-mid segment seeing mild sell pressure while longer maturities were better supported. The average benchmark yield rose slightly by 6bps w/w to close at 15.61%.
We expect cautious trading to persist, with investors focusing on auction outcomes, liquidity conditions, and inflation expectations.
Foreign Exchange
The naira traded within a relatively stable range during the week, supported by improved market supply and steady demand conditions. Trading activity was concentrated around the ₦1,360–₦1,372 band, with modest appreciation pressure seen toward the end of the week.
External reserves remained supportive, while market participants continued to monitor oil prices and dollar liquidity conditions.
We expect the naira to trade within a controlled range, with direction influenced by market supply, oil price movement, and intervention flows.
Naira Movement This Week (₦/$)
Sources: CBN, Pavline Capital Research
FGN Eurobonds
The Nigerian Eurobond market traded on a mildly positive note as improved global risk appetite supported buying across select sovereign papers. Sentiment was aided by firmer crude oil prices and moderation in U.S. Treasury yields.
Demand was more visible across short-to-mid duration papers, while longer maturities saw selective positioning. Consequently, average benchmark yield declined by 9bps w/w to close at 6.78%.
We expect a cautiously constructive tone, with investor sentiment guided by global risk appetite, oil prices, and U.S. rate expectations.
Eurobonds Closing Prices
| Nigerian Sovereigns | Bid YTM (%) | Offer YTM (%) | Bid Price | Offer Price |
|---|---|---|---|---|
| 6.125 NIGERIA SEP 2028 | 100.70 | 101.88 | 5.80 | 5.30 |
| 8.375 NIGERIA MAR 2029 | 106.88 | 107.85 | 5.76 | 5.36 |
| 7.143 NIGERIA FEB 2030 | 103.02 | 103.70 | 6.18 | 5.98 |
| 8.747 NIGERIA JAN 2031 | 108.10 | 108.90 | 6.62 | 6.41 |
| 9.625 NIGERIA JUN 2031 | 112.14 | 112.74 | 6.68 | 6.55 |
| 7.875 NIGERIA FEB 2032 | 105.05 | 105.86 | 6.75 | 6.58 |
| 10.375 NIGERIA DEC 2034 | 118.95 | 119.74 | 7.22 | 7.10 |
| 8.6308 NIGERIA JAN 2036 | 108.92 | 109.74 | 7.18 | 7.06 |
| 7.625 NIGERIA NOV 2047 | 96.80 | 97.72 | 7.82 | 7.70 |
| 8.25 NIGERIA SEP 2051 | 101.20 | 102.04 | 8.02 | 7.92 |
Market Outlook
The coming week is expected to be shaped by liquidity conditions, CBN activity, auction expectations, and global risk sentiment. Investors are likely to remain selective, focusing on yield pick-up, duration positioning, and liquidity-driven opportunities.
Key Takeaways
- System liquidity improved during the week, supported by OMO maturity inflows.
- Treasury bills traded mildly bullish, with demand concentrated around longer-dated papers.
- FGN bonds traded mixed as investors assessed inflation expectations and auction supply.
- Eurobond sentiment improved as global risk appetite strengthened and oil prices remained supportive.
- Next week’s market direction is expected to remain liquidity-driven and auction-sensitive.
Sources
FMDQ, CBN, Pavline Capital Research
Contact Dealing Desk
For fixed income trading and advisory enquiries.
+234 706 470 0921 fixedincome@pavlinecapital.com