The first week of February 2026, Nigeria’s financial market exhibited its resilience amidst dynamic local and global market conditions. Domestically, the Nigeria Treasury Bills (NTB) auction conducted on February 4 showed high demand for long-dated sovereign instruments, with the 364-day bill oversubscribed at 5x and its stop rate compressed to 16.99%, signalling investor confidence and a structural bullish outlook for the Nigerian fixed income market. The January PMI, at 55.7 points, marked the 14th consecutive month of expansion, driven by broad-based growth in industry, services, and agriculture. Meanwhile, S&P affirmed Nigeria’s B- sovereign rating with a positive outlook, supporting global confidence in fiscal consolidation and economic reforms. Market breadth was further supported by ASI gains to 171,727.49, improved FX liquidity, and rising external reserves, even as selective demand shaped yields across bills and bonds. Commodities reflected global volatility, with Brent at $68.70/bbl and WTI at $64.30/bbl by the weekend, despite easing US–Iran tensions, and gold stabilizing at $4,988.40/oz following extreme swings driven by the Federal Reserve Bank expectations and profit-taking. Together, these developments illustrate a Nigerian market increasingly anchored on strategic capital deployment, resilient macro fundamentals, and growing integration with global market flows.
Interbank liquidity opened with a surplus of over ₦2.57 trillion on Friday, marking a week-to-date increase of 331.6%, and a weekly peak after it opened at ₦596.45 billion. Money market rates declined after opening at 22.60% (-347bps) and 23.20% (-336bps) for the Open Repo Rate (OPR) and Overnight (O/N) rate, respectively, easing at 22.50% and 22.80% individually, before closing at 22.50% and 22.81%, respectively. In the currency market, the Naira traded between $/₦1,360.00 and $/₦1,396.00 during the week, closing at $/₦1,366.19 on Friday.
The February 4, 2026, NTB auction result revealed a market that is increasingly duration-driven and yield-sensitive, with investor behaviour shaped by expectations of an easing interest rate cycle. The extraordinary 5.4x bid-to-cover ratio with an allotment of 1.01x for the 364-day bill against its offer indicates that institutional investors were aggressively locking in long-dated risk-free instruments, leading to a sharp compression in its stop rate to ~16.99% (-137bps) from the previous close, despite wide bid ranges that extended above 21%. This suggests that demand is no longer purely opportunistic but strategic. Conversely, the under-subscription of the 182-day and 91-day tenors at a bid-to-cover ratio of 0.61x and 0.44x, and allotment of 0.42x and 0.40x signifies that liquidity is being selectively deployed, as investors prefer to avoid reinvestment risk while maintaining superior return. The cleared stop rate were unchanged at 15.84% and 16.65% for the mid- and short-day bills. Overall, the auction points to a flattening yield curve, excess demand for sovereign duration, and a growing consensus that forward rates will trend lower, reinforcing a structurally bullish outlook for Nigerian fixed income.
AUCTION DATE | 04-02-2026 | 04-02-2026 | 04-02-2026 |
MATURITY DATE | 05-02-2026 | 05-02-2026 | 05-02-2026 |
TENOR | 91-DAY | 182-DAY | 364-DAY |
OFFER (₦) | 150,000,000,000 | 200,000,000,000 | 800,000,000,000 |
SUBSCRIPTION (₦) | 66,050,846,000 | 123,407,708,000 | 4,396,832,675,000 |
ALLOTMENT (₦) | 63,213,846,000 | 80,609,707,000 | 808,784,109,000 |
BID RANGE (%) | 14.5000 – 20.0000 | 15.6000 – 20.0300 | 16.0000 – 21.0000 |
STOP RATES (%) | 15.8400 | 16.6500 | 16.9870 |
PREVIOUS STOP RATES (%) | 15.8400 | 16.6500 | 18.3600 |
The December 2025 Federation Account Allocation Committee’s (FAAC) distribution of ₦1.97 trillion highlights Nigeria’s continued reliance relating to on non-oil revenue, particularly Value Added Tax (VAT), which surged by ₦350.90 billion month-on-month, offsetting a decline in statutory (oil-linked) revenue. The strong VAT performance signals improving domestic consumption and tax efficiency, providing short-term fiscal support for all tiers of government, while the weakness in oil-related inflows highlights ongoing vulnerability to energy sector volatility and highlights the importance of sustained revenue diversification.
The secondary market witnessed mild retracing earlier in the week on bond yields (majorly 31s, 34s, 35s) to 16% level before further dropping to lower 15% levels following the NTB auction, while bills moved within the mid-16% to low-20% band. In the money market, positioning stayed constructive with recent issuance demand as investors moved deliberately across the curve, signifying a firmer preference favouring short- and long-dated OMO and NTB instruments, balancing yield opportunities with vigilant duration extension in a liquidity-rich market.
The Naira advanced its appreciation in the Nigerian Foreign Exchange Market (NFEM), from ₦1,390.36 to ₦1,366.19, with a gain of ₦24.17 (+1.74%) and ₦20.36 (+1.47%) week-on-week, closing at ₦1,366.19 (up from ₦1,386.55 the previous week). Intra-week movements reflected a resilient market despite FX pressures, braced by improved liquidity and steady growth in external reserves.
Nigeria’s external reserves maintained their upward momentum, rising from $46.59 billion on February 2 to $46.91 billion by February 5, 2026, with a month-to-date gross gain of approximately $317.45 million (+0.68%). Blocked funds increased from $561.03 million to $572.69 million (+2.03%), with an improved blocked reserve ratio of 1.22%, indicating improved FX liquidity, enhanced reserve management efficiency, and continued progress in clearing outstanding obligations.
According the Central Bank of Nigeria’s (CBN) Purchasing Managers’ Index (PMI), Nigeria’s economy is exhibiting strong recurring drive, with the January 2026 composite PMI at 55.7 points marking a 14th consecutive month of expansion, reflecting broad-based recovery across industrial, services, and agriculture, improving domestic demand, rising business activity, and more efficient supply chains, alongside early signs of easing inflation pressures. Complementing this, is S&P’s affirmation of Nigeria’s B- sovereign rating with a positive outlook signaling growing global confidence in the country’s macroeconomic reforms, particularly FX liberalisation and fiscal consolidation, which strengthens Nigeria’s standing in international capital markets, supports lower risk premiums, and enhances the prospects for sustained foreign portfolio and direct investment inflows into 2026.
JPMorgan’s planned Frontier Market Local Currency Bond Index, with Nigeria as a major weighting (8–10%), represents a structural catalyst for local markets, as index inclusion is likely to drive passive inflows and raise active investor exposure to Naira-denominated sovereign debt. This supports Nigeria’s strategic shift away from costly Eurobond financing toward a deeper domestic debt market, helping reduce currency risks. While near-term effects may include yield compression and improved fiscal space, the sustainability of these gains will hinge on the CBN’s ability to ensure FX liquidity and smooth profit repatriation, as global investors increasingly integrate the Naira into diversified high-yield portfolios.
In the first week of February 2026, the Nigerian Exchange All-Share Index (ASI) traded steadily in an upward direction, reflecting improving investor sentiment and broad-based buying activity. Following FirstHoldCo Plc’s 2025 full-year unaudited results, which showed a sharp drop in profits driven by large one-off impairments, market sentiment turned cautious to negative, with investors focusing on the hit to earnings despite growth in interest income. Its share price declined on Monday but rebounded by +10% on Tuesday following FirstHoldCo Plc’s explanation that the cleanup was a strategic balance sheet reset.
Equities ASI saw a mild uptick from 165,385.00 on Monday to 165,902.00 on Tuesday, by mid-week it advanced to 168,030.00, and increased to 170,005.00 on Thursday, before closing Friday at 171,727.49, marking a cumulative gain over the five trading sessions across key sectors, led by industrial, oil & gas, and banking. Overall, the ASI recorded a modest week-to-date gain of 3.84% (+6343.91 points) and a week-on-week increase of 3.84% (+6355.39 points), lifting the year-to-date return to +10.36%.
During the first week of February 2026, global financial markets operated in a high-volatility, risk-repricing environment, shaped by a major shift in US monetary leadership and mounting sector-specific shocks. Investor sentiment was initially dominated by the nomination of Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair, which triggered a historic unwinding in precious metals, with gold plunging nearly 10% from record highs above $5,600/oz as markets priced in a more hawkish balance-sheet stance. Despite this, the European Central Bank and Bank of England held policy rates at 2.15% and 3.75%, to control inflation, while US equities briefly showed resilience, with the S&P 500 crossing the 7,000-mark midweek on strong Q4 earnings from Alphabet and Amazon. Though momentum quickly reversed into a tech-led global selloff, after Amazon shares fell over 11% on following information of $200bn in capital expenditure for 2026, sparking broader declines across the Nasdaq, S&P 500, and Asian markets (Kospi -1.4%). In Europe, Stellantis shares were halted after a 14.4% plunge following a €22.2bn restructuring charge and dividend suspension, while Bitcoin remained highly volatile, sliding to $60,000 before rebounding toward $70,000, marking a roughly 50% drawdown from its October peak. Geopolitical tensions, including US diplomatic friction over Greenland and a partial US government shutdown, further unsettled markets, even as the US dollar rebounded on a strong Institute for Supply Management (ISM) manufacturing report, signalling the first sector expansion in 12 months. Against this fragile backdrop, India stood out as a relative bright spot, with the Reserve Bank of India (RBI) holding rates at 5.25% and finalizing a landmark US trade deal cutting tariffs to 18%, including a potential $80bn Boeing aircraft order, illustrating the sharp divergence in global economic drive.
Global oil markets experienced heightened volatility during the week, driven by shifting geopolitical signals and ample supply conditions. On Monday, prices recorded their sharpest single-day decline in over six months, with Brent falling 4.5% to $66.08/bbl and WTI dropping to $62.20/bbl, as easing US–Iran tensions led to a significant unwinding of geopolitical risk premiums. Prices stabilized on Tuesday, with WTI at $62.50/bbl and Brent at $67.11/bbl, amid uncertainty over trade negotiations and ongoing nuclear diplomacy. On the supply side, US crude inventories fell by 3.5 million barrels last week, according to the Energy Information Administration, less than the 11.1 million barrel decline estimated by the American Petroleum Institute (API) on Tuesday. Midweek, prices rebounded on supply-side concerns, as US crude inventories fell by 3.5 million barrels, lifting WTI to $65.20/bbl and Brent to $67.43/bbl on Wednesday. Still, gains proved short-lived, with renewed optimism over US–Iran talks and weaker US jobs data pushing prices lower on Thursday, as Brent slipped to $67.17/bbl and WTI to $63.21/bbl. By Friday, oil prices edged higher again, with WTI at $64.30/bbl and Brent at $68.70/bbl. Yet, markets remained on track for their first weekly decline in six weeks, reflecting persistent oversupply signals from OPEC+ and Saudi pricing actions, alongside fragile geopolitical risk sentiment.
Gold prices experienced extreme volatility during the week, driven by shifting expectations at the Federal Reserve and aggressive profit-taking following a historic rally. Bullion initially plunged over 4% to $4,700/oz on Monday, marking one of its steepest falls in decades, after President Trump’s nomination of Kevin Warsh as Federal Reserve Chair, triggered concerns over a more hawkish monetary stance and prompted liquidation of crowded long positions following January’s surge to record highs above $5,600/oz. Prices rebounded sharply on Tuesday, with gold jumping over 5% to around $4,950/oz, as dip buyers re-entered and geopolitical tensions supported safe-haven demand. However, gains proved unsustainable, with gold ingots slipping back below $4,900/oz by Wednesday and extending losses to around $4,850/oz on Thursday, as weaker US labour data fuelled broad debt reduction across risk assets rather than defensive inflows. By Friday, gold closed at $4,988.40/oz but remained on track for a second successive weekly decline, reflecting fading drive, heavy profit-taking, and growing sensitivity to monetary policy signals after an overheated rally.
The week ahead brings developing macroeconomic updates. Locally, an anticipated inflow of over ₦993.0 billion in maturing OMO bills, into a system flushed with liquid, will lead to an increased reinvestment push. Potentially, prompting fresh OMO(s) auction or other buying interests.
