Volatile Market and Cautious Investor Positioning
Nigeria’s latest CBN indicators present a consistent picture of an economy balancing macroeconomic stabilisation against weakening real-sector activity. While the Composite Purchasing Managers Index (PMI) improved marginally to 49.6 in May 2026 from 49.4, it remained below the 50-point threshold for a second consecutive month, signalling continued contraction driven by weak services and industrial activity despite sustained agricultural expansion.
Liquidity, Yields, and Market Positioning: Navigating a Selectively Cautious Market
FGN bond yields increased, breaching above 17% into the mid-17% range, as activity remained concentrated at the short end, though demand for longer tenors stayed subdued, reinforcing cautious positioning despite selective interest. In contrast, Eurobonds traded largely range-bound with a mild bullish bias, as yields eased by about 1–7 basis points across the curve, led by the 2027 paper (-7bps) and marginal declines of 1–2bps in other maturities, reflecting steady investor demand and limited directional volatility across tenors.