September 4, 2026/Cordros Report
In August, Global fixed income markets remained relatively subdued as persistent inflation and resilient labor market continued to temper expectations for monetary policy easing. However, a lull in Middle East hostilities and renewed investor demand provided some support across emerging market debt. Meanwhile, African Eurobonds continued to recover, with performance benefiting from resilient demand and differentiated fundamentals.
Domestically, Nigeria’s fixed income market remained supported by strong system liquidity and robust investor demand, with the CBN’s opening of the OMO primary and secondary markets to all eligible domestic investors creating greater scope for investors to reposition towards higher-yielding instruments. This supported demand for OMO bills, while also driving some rotation away from NTBs.
Looking ahead, ample liquidity should continue to underpin demand in the near term. However, sticky inflation, a cautious monetary policy stance and elevated government borrowing are likely to limit the scope for a sustained, broad-based decline in yields. Overall, liquidity conditions, domestic supply and the evolving global macroeconomic and geopolitical environment should remain the key drivers of market direction.