The third week of February 2026 witnessed events including the scheduled Nigeria Treasury Bills (NTB) and Central Bank of Nigeria’s dual Open Market Operation (OMO) auctions, January 2026 Inflation report. These occurred alongside the matured OMO and NTB inflows of ₦1.87trn and ₦765.89bn. With the positive macroeconomic indicators, including easing inflation with headline, food, and core rates at 15.10%, 8.89%, and 17.79% respectively, domestic currency appreciation, improved foreign reserve growth, and surplus system liquidity, reinforced expectations that yields will reprice downwards to reflect current realities. Consequently, analysts anticipate a potential policy easing at the upcoming Monetary Policy Committee (MPC) meeting. During the period, total sales volume of ₦3.65trn in OMO bills and ₦1.91trn in NTBs occurred. This shift, paired with the DMO’s tactical “scarcity play” in reducing its February bond offer to ₦800 billion from ₦900 offered in January, signals a clear market consensus: the interest rate peak is over. With the Naira stabilizing and the NGX All-Share Index hitting a new record above 190,000.00, institutional capital is now racing to lock in high double-digit yields before the Central Bank’s expected pivot toward a lower-rate environment. Against a volatile global backdrop, particularly the rising US-Iran geopolitical tension, commodities swinged with Brent crude, West Texas Intermediate (WTI), and gold closing at $71.64/bbl., $66.36/bbl., and $5,070.18/oz, respectively, these events strengthened market confidence, deepened investor participation, and signalled a more resilient, diversified, and growth-ready Nigerian financial market.
Interbank liquidity opened the week at a peak of ₦4.68trn surplus before declining by 53.9% week-to-date on Friday at ₦2.16trn. Money market rates were largely stable; the Open Repo Rate (OPR) opened at 22.50% and closed unchanged, while the Overnight rate (O/N) opened at 22.79% rate, peaking at 22.86% before closing at 22.71%. In the currency market, the Naira traded between $/₦1,318.00 and $/₦1,353.00, closing at $/₦1,346.32 on Friday.
In the secondary market, Bond price movement was largely bullish compared to the previous week, aggressively tilting to breach the 16% threshold (particularly 31s, 33s, 34s, 35s) to high-15% level. NTBs settled in mid-15% (following the auction closing at 15.90%) while OMOs traded between a range of 17% to low-19% band. At the money market, positioning stayed constructive with recent issuance demand as investors moved deliberately across the curve, especially at the long end, signifying a firmer preference favouring short- and long-dated OMO and NTB instruments, balancing yield opportunities with duration extension.
According to the National Bureau of Statistics (NBS), Nigeria’s January 2026 inflation report signalled a consolidation of the disinflationary trend and 10th consecutive easing since the 2025 rebasing effect, with the Headline easing to 15.10% (-5bps), from December’s data, despite analyst projections of a base effect-driven spike toward 19%. The standout was Food inflation at 8.89% (-195bps), supported by a drop in staple prices and the dampening effect of full-capacity domestic refining on logistics costs. Core Inflation stood at 17.72% (-91bps), highlighting persistent structural rigidities and high imported costs that prevent a more aggressive downward move. This “sticky” but positive trajectory suggests that while the “survival” era of hyperinflation is over, the Central Bank is likely to maintain a cautiously restrictive stance at the 304th MPC meeting to ensure this macroeconomic gain is not eroded.
The Apex bank of Nigeria unveiled the ultra-short-day OMO bill ever issued in the money market at the February 16, 2026, auction, whose results highlighted a market defined by extreme selectivity and a strategic flight to duration, as institutional investors largely shunned the 8-day “liquidity bridge” in favour of the 99-day “yield lock.” The astonishing 6.6x oversubscription and a bid-to-cover ratio of 1.47x on the 99-day tenor showed a significant liquidity surplus looking for safety ahead of the February interest rate decision. The CBN allotted 4.48x its offer at 19.48% to prevent excess cash from fueling price pressure, driving the management cost within its desired bounds. While the 8-day bill witnessed a low demand of 0.18x against its offer, with a sale of ~0.017x, indicating a preference for maintaining liquid positions for immediate operational needs or anticipation of better entries elsewhere. Despite the bid range between 22% and 23%, it cleared the short-day at 22.39%, marking the highest stop rate recorded so far in 2026. Effective yield ticked at 22.50% and 20.56% for the 8- and 99-day bill respectively.
At the second OMO auction, the result highlighted the previous outcome with the 7-day tenor record of zero sales, signaling a banking system that is either currently cash-tight or unwilling to commit even “overnight” excess for a short period due to reinvestment risk. Conversely, the 105-day bill witnessed a strong 7.7x oversubscription and a bid-to-cover ratio of 1.01x, a clear signal that institutional players strongly preferred to secure 20.59% effective yield. By allotting ₦2.3 trillion (nearly 8x the original offer), the Central Bank effectively executed a “massive liquidity sweep,” prioritizing an aggressive mop-up to keep the Naira stable and in check. Stop rate declined by 4bps to 19.44% while the effective yield eased by 3bps.
AUCTION DATE | TENOR | OFFER (₦‘B) | BIDS (₦‘B) | TOTAL SALE (₦‘B) | STOP RATES (%) | PREVIOUS TENOR STOP RATES (%) |
16-02-2026 | 8-DAY | 300.00 | 55.00 | 5.00 | 22.3900 | 0.0000 |
99-DAY | 300.00 | 1,983.20 | 1,346.20 | 19.4800 | 0.0000 | |
17-02-2026 | 7-DAY | 300.00 | 50.00 | 0.00 | 0.0000 | 22.3900 |
105-DAY | 300.00 | 2,327.60 | 2,300.60 | 19.4400 | 19.4800 |
The February 18, 2026, NTB auction result highlighted a high-liquidity environment with a stark divergence in investor appetite across tenors. The 364-day paper remained the primary focus, recording a massive 5.09x oversubscription and bid-to-cover ratio of 2.38x, which enabled the DMO to compress the stop rate by 108.7 basis points to 15.90%. In contrast, the 91-day and 182-day bills remained undersubscribed on offer at 0.75x and 0.47x with bid-to-cover ratios at 1.07x and 1.00x, respectively, and cleared at a marginal rate of 15.80% (-4bps) and 16.65% unchanged. With respect to demand, the short-day improved by 69.5% while the mid- and long-day declined by 24.0% and 7.32% from the previous sale; this trend characterized investors’ keen preparation of a downward rate adjustment, reflecting a market consensus that interest rates may ease, prompting a deliberate move to secure current returns before further potential easing in the 2026 fiscal cycle. Effective yields remained unchanged at 16.49% and 18.15%, while the long tenor declined to 18.89% (-156bps), reflecting duration compensation. Meanwhile, the stop rate displayed an unusual pattern, with the mid-tenor emerging as the most attractive at 16.65%, followed by the 1-year, and then the short tenor.
AUCTION DATE | 18-02-2026 | 18-02-2026 | 18-02-2026 |
MATURITY DATE | 21-05-2025 | 20-08-2026 | 18-02-2027 |
TENOR | 91-DAY | 182-DAY | 364-DAY |
OFFER (₦) | 150,000,000,000 | 200,000,000,000 | 800,000,000,000 |
SUBSCRIPTION (₦) | 112,009,879,000 | 93,746,155,000 | 4,074,865,183,000 |
ALLOTMENT (₦) | 105,050,358,000 | 93,406,153,000 | 1,710,296,542,000 |
BID RANGE (%) | 14.8800 – 18.0300 | 14.8000 – 20.0000 | 15.0000 – 23.5000 |
STOP RATES (%) | 15.8000 | 16.6500 | 15.9000 |
PREVIOUS STOP RATES (%) | 15.8400 | 16.6500 | 16.9870 |
The Debt Management Office (DMO) is executing a tactical “scarcity play” for the February 2026 FGN Bond auction by shifting to a 3-paper issuance strategy and reducing the total offer to ₦800 billion (down by ₦100 billion from January). The move into reopened 7-year and 10-year tenors, specifically the 17.95% JUN 2032, 19.89% MAY 2033, and 19.00% FEB 2034, is a deliberate move to flatten the yield curve and capitalize on the current “hunt for duration” triggered by a cooling inflation print of 15.10% and expectations of an interest rate cut. Despite the combined lower offer volume, it remains substantial enough to drive significant bidding competition. Given the ₦1 trillion oversubscription seen in January, we anticipate a massive total “oversale,” with the DMO potentially allotting well above its initial target to cover the 2026 deficit.
Nigeria’s currency appreciated in the Nigerian Foreign Exchange Market (NFEM), from ₦1,347.78 to ₦1,346.32, with a gain of ₦1.46 (+0.11%) and ₦9.09 (+0.67%) week-on-week, closing at ₦1,346.32 (up from ₦1,347.78 the previous week). Intra-week movements reflected a resilient market despite FX pressures, braced by improved liquidity and steady growth in external reserves.
Foreign reserves sustained its upward momentum, rising from $46.59 billion on February 2 to $48.50 billion by February 17, 2026, with a month-to-date gross gain of approximately $1.91 billion (+4.09%). Blocked funds increased from $561.03 million to $617.66 million (+10.07%), with an improved blocked reserve ratio of 1.27%, indicating improved FX liquidity, enhanced reserve management efficiency, and continued progress in clearing outstanding obligations.
Sterling Financial Holdings has transitioned from a defensive recapitalization phase to an aggressive growth posture, having injected ₦153 billion into its core subsidiaries (Alternative Bank (AltBank) and Sterling Bank) to achieve full CBN compliance well ahead of the 2026 deadline. This strategic “early-mover” advantage, marked by a massive 99% surge in profit before tax and a significant improvement in operational efficiency (cost-to-income ratio dropping from 72% to 63%), removes the regulatory overhang that has suppressed bank valuations. With ₦424 billion in shareholders’ funds and a newly capitalized wealth management arm, the Group is uniquely positioned to dominate both conventional and non-interest markets, offering a compelling “Growth + Value” proposition for equity investors on the NGX.
The Nigerian Exchange Limited (NGX) equities market sustained its bullish momentum despite declining on Tuesday, with the ASI advancing to fresh highs, supported by broad-based buying across major sectors and robust turnover. The market staged a strong rally, driven by banking, oil & gas, industrial, and consumer stocks, lifting market capitalisation and investor gains. The ASI crossed the 190,000 mark on Monday at 190,281.57, briefly eased to 189,340.27 on Tuesday, by mid-week, it rebounded to 190,427.96, and advanced to 193,131.18 on Thursday, before closing Friday at 194,987.80, marking a cumulative gain over the five trading sessions. Overall, the ASI recorded a modest week-to-date gain of 2.47% (+4705.80 points) and a week-on-week increase of 6.95% (+12674.72 points), lifting the year-to-date return to +25.30%.
Global financial markets shifted into a “geopolitical risk-off” mode as surging oil prices and U.S.-Iran military posturing pressured large-cap equities. On February 19, the S&P 500 slipped 0.3% to 6,861.89, breaking a three-day winning streak, while the Nasdaq and Dow followed suit due to a combination of heightened Middle East tensions and a cautious annual outlook from Walmart. Despite this volatility, the Russell 2000 small-cap index showed unique resilience with a 0.2% gain, continuing an underappreciated rotation away from tech-heavy concentrations. Across the Atlantic, the UK’s disinflationary victory, with January Consumer Price Index (CPI) falling to a 10-month low of 3.0% in January 2026 per Office of National Statistics data from December’s 3.4%, strengthening markets expectation of an 85% probability for the Bank of England’s rate cut in March, while the Eurozone navigates leadership uncertainty amid reports that European Central Bank’s (ECB) President Christine Lagarde may step down early to facilitate a successor’s appointment ahead of the 2027 French elections. The merging of falling inflation in the UK and rising energy costs in the U.S. creates a split outlook for central banks: one that encourages easing to support growth and another that demands caution to prevent a secondary inflation spike.
Crude oil markets experienced a volatile week, initially softening but ultimately holding firm near six-month highs as geopolitical tensions overshadowed oversupply concerns. On Monday, WTI and Brent traded at $63.46/bbl. and $68.31/bbl., respectively, amidst renewed U.S.–Iran nuclear talks, increased U.S. military presence in the Middle East, and OPEC+ discussions around potential April output hikes, while the International Energy Agency (IEA) maintained its 2026 surplus outlook and trimmed demand growth forecasts. Prices eased on Tuesday with WTI at $62.17/bbl. and Brent at $67.18/bbl. ahead of Geneva talks and maritime drills in the Strait of Hormuz, before rebounding on Wednesday, with WTI at $64.31/bbl. and Brent $69.45/bbl. following the abrupt end of Ukraine-Russia peace discussions and ahead of the U.S. American Petroleum Institute (API) and Energy Information Administration (EIA) inventory releases. Momentum strengthened on Thursday as WTI traded at $66.49/bbl. and Brent at $71.51/bbl. on reports of possible U.S. military action and a 0.61 million-barrel crude draw. Friday, WTI closed at $66.36/bbl. while Brent settled at $71.64/bbl., capping weekly gains above 5% after a 10–15 day U.S. deadline for Iran negotiations and a sharp 9 million-barrel inventory draw heightened supply disruption fears around the Strait of Hormuz. Overall, geopolitical risk premiums dominated market sentiment, outweighing surplus projections and OPEC+ supply flexibility signals.
Gold traded in a volatile but largely range-bound pattern around the $5,000/oz level, driven by shifting Federal Reserve expectations, dollar strength, and geopolitical tensions. Prices eased Monday to $4,980.03/oz on profit-taking, fell further Tuesday to $4,883.36/oz amid a stronger dollar and tempered rate-cut expectations, then rebounded Wednesday to $4,997.95/oz on dip-buying as Fed officials delivered mixed signals. Bullion strengthened Thursday to $5,003.76/oz following hawkish FOMC minutes and lower jobless claims falling to 206,000, before closing at $5,070.18/oz on Friday as escalating U.S.–Iran tensions boosted safe-haven demand. Overall, gold posted a modest weekly change of +1.81%, reflecting the ongoing tug-of-war between dollar resilience and geopolitical risk support.
The week ahead features key macroeconomic trend determinants for the Nigerian Financial Market, from the scheduled DMO’s FGN Bond auction on February 23 with a total offer of ₦800 billion across three opened papers, to the 304th Monetary Policy Meeting decision on February 24, alongside the expected inflows of ₦1.27trn from coupons and maturing OMO bills. This would offset the Bond sale, increasing the liquidity in an already cash awash system, likely to drive a renewed reinvestment push, potentially triggering fresh OMO auctions or heightened buying interest in other instruments.
Consequently, we expect the FGN auction to close at marginal rates between 16.15% and 16.45%, with the 2033 paper likely seeing the strongest demand as investors bid aggressively to lock in before the secondary market yield floors fall further toward 15.50%.
Date | FGN Bond Coupon | OMO Maturity | NTB Maturity |
Feb. 23 | 18.50% Feb. 2031 ₦250.97bn 19.00% Feb. 2034 ₦141.77bn | ₦725.70bn | – |
Feb. 24 | 13.98% Feb. 2028 ₦112.67bn | ||
Feb. 27 | 17.945% Aug. 2030 ₦41.13bn |
By: Sandra A. Aghaizu
Inflation softens…
the market loosens its tie.
Liquidity flows back like a rising tide,
bills oversubscribed,
bonds wanted.
The Naira stands firm,
reserves quietly swell,
equities print new highs.
At the 304th MPC door,
rates pause anticipated…
and yields begin to look down.
