Foreign Investors Put Nigeria Eurobond on Tab, U.S Yields Shift
The average yield on Nigerian sovereign Eurobonds decreased in the global market as foreign portfolio investors (FPIs) continued to expand their positions amidst a positive change in sentiment.
Foreign investors have shown increased interest in Nigeria’s Eurobond, driving down the average yield on the global market. This surge in investor activity coincided with a shift in U.S. yields, further boosting confidence in Nigerian assets.
Bargain hunting in Nigerian US dollars was a reversal of previous trading trends, with risk-off sentiment giving way to a more positive outlook. The hunting underscores the evolving dynamics of global markets and the growing appeal of Nigerian assets to international investors.
MarketForces Africa reported that there were sell pressures on U.S. Treasury notes. The U.S. Treasury auctioned 30-year bonds on Thursday, and this went well, according to ING rates strategists Padhraic Garvey and Benjamin Schroeder in a note.
The 2-year US Treasury yield climbed by 1 basis point to settle at 3.874%. Market data showed that the 10-year Treasury yield rose by almost 2 basis points to 4.363%. Meanwhile, the 10-year US Treasury yield surged by 2.5 basis points to settle at 4.885% at the same time, reflecting sell-off pressure.
Elsewhere, the UK 10-year gilt yield edged down to 4.59%, as markets increasingly priced in an August rate cut from the Bank of England, despite inflation still above 3%. Recent economic data pointed to growing weakness, with GDP shrinking 0.1% in May, following a 0.3% fall in April, raising the risk of a second-quarter contraction.
Yesterday, the Nigerian Eurobond market ended the session on a bullish note, driven by strong investor demand across the short-, medium-, and long-term segments of the yield curve.
The most notable buying interest was observed in the FEB-2032 bond, which contributed significantly to the overall market performance. As a result, average yields declined by 8 basis points, settling at 8.50%, Cowry Asset Limited said in a note
African Eurobonds gained ground today as US jobless claims fell to 227,000, a 5,000 decline from the previous week’s revised level, signaling a resilient labour market. While this reduces near-term Fed cut expectations (per June minutes showing limited July cut support), Nigerian yields still dipped on broader risk appetite.
Investors are closely watching potential US trade deals with major partners like the EU, India, and Canada. While progress with India seemed likely, Trump’s new 10% tariff threat on BRICS members has raised doubts.#Nigerian Eurobond Yield Rises to 8.54% as FPIs Trim Holdings
