Fixed income trading surges as treasury bill yields climb

By Abubakar Yunus

Nigeria’s fixed income market witnessed a sharp increase in trading activity last week, with Treasury bill and Federal Government bond transactions rising significantly as investors adjusted portfolios amid persistent inflationary pressures.

Data released by the Financial Markets Dealers Association (FMDA) for the week ended June 19, 2026, showed that Treasury bill turnover surged by 137.49 per cent to N1.51tn, while trading volume in Federal Government of Nigeria (FGN) bonds climbed by 75.91 per cent to N1.20tn.

The development reflects an active repricing cycle in the domestic debt market, as investors sought higher returns in response to rising inflation and tightening liquidity conditions.

FMDA data revealed that yields increased across most maturities in both the Treasury bill and bond markets, signalling bearish sentiment and changing investor expectations.

The average yield on FGN bonds edged up by two basis points to 16.95 per cent during the review period.

The seven-year and 30-year bond tenors recorded the largest increases, rising by 24 basis points each, while the five-year bond was the only maturity to post a decline, easing by one basis point to 17.39 per cent.

Treasury bills experienced a steeper repricing, with the average yield jumping by 72 basis points to 18.31 per cent.

The nine-month Treasury bill recorded the sharpest rise, gaining 154 basis points to close at 20.15 per cent, while the six-month instrument advanced by 98 basis points to 18.78 per cent.

According to FMDA, weaker demand and investors’ preference for higher returns contributed to the broad rise in Treasury bill yields.

The association noted that the trend was consistent with the June 17 Nigerian Treasury Bills primary auction, where the Central Bank of Nigeria raised N1.49tn at higher stop rates, with the 364-day bill increasing by as much as 99 basis points.

Analysts said the market movement suggests that investors continued to reposition their fixed income holdings as yields adjusted upward.

The report further showed that Nigeria’s fixed income market diverged from global bond markets during the period, as domestic inflation and liquidity pressures sustained upward momentum in yields.

Nigeria’s benchmark 10-year bond yield rose by 17 basis points to 17.61 per cent, in contrast to declines recorded in several major economies.

The yield on the United States 10-year Treasury note fell by five basis points to 4.46 per cent, while the United Kingdom’s equivalent declined by 12 basis points to 4.79 per cent.

Japan’s 10-year yield dropped to 2.62 per cent, South Africa’s fell to 8.41 per cent, and Kenya’s eased to 12.14 per cent. China’s benchmark yield remained unchanged at 1.75 per cent.

FMDA said Nigeria’s 10-year bond now offers a yield premium of 13.15 percentage points over the US benchmark, highlighting the impact of domestic inflation and liquidity conditions on local fixed income pricing.

The association added that inflation, which stood at 15.93 per cent in May 2026, alongside liquidity pressures, continued to influence market pricing despite signals of more accommodative monetary policies from major central banks across developed economies