Nigeria’s US Dollar Bonds Yield Ease on Offshore Positioning
Nigeria’s US dollar bonds attracted offshore investors’ attention in the international debt market, reflecting improved confidence, supported by oil-driven fiscal performance.
The Nigerian Sovereign Eurobond experienced buying interest across the curve, supported by gains and higher oil prices. Macro-economic indicators continue to trend positively, though the market saw a surge in the consumer price index in April, driven by geopolitical tensions.
Government earnings are projected to benefit from disruption in the Middle East, with Nigeria’s gross external reserves hovering around $48.5 billion.
Economic indicators from the U.S. remained varied during the session, offering little incentive for the Federal Reserve to adopt a more accommodative stance.
While the ISM Services PMI dipped to 53.6, suggesting a deceleration in growth amid ongoing inflationary pressures, the JOLTS report showed job openings falling to approximately 6.87 million.
These figures point toward a gradual softening of the labour market, though the broader economic foundation remains notably durable. The curve closed on a bullish note, with yields declining across almost all maturities.
The broad-based compression reflects sustained buying interest, with only the Sep 2033 bond bucking the trend, rising by 23bps, indicating mild selectivity in the market. Consequently, the average benchmark yield declined by 7bps to close at 6.79%
“We expect a cautious trading environment with a slight ‘risk-off’ bias based on recent market data and the U.S. macroeconomic environment, AIICO Capital Limited told investors in its note. Nigeria’s US Dollar Bonds Yield Ease on Offshore Positioning
