African Eurobonds Face Sell Bias, U.S Yield Rises on Powell Probe
African Eurobond selling pressures intensified at the international market as offshore investors reacted to U.S. yields and uncertainties in the global commodity market.
Oil-linked issuers saw yields on their respective sovereign Eurobonds adjusted upward due to significant profit-taking activities experienced across the curve.
The market witnessed a spike in U.S. yield as Federal Reserve Chair Jerome Powell’s criminal probe stoked sell pressures, while investors moved to safe havens.
The benchmark 10-year Treasury yield moved higher on Monday as investor worries around the Federal Reserve’s independence spurred volatility in the stock market and following the 10-year auction.
The 10-year Treasury yield was up more than 1 basis point at 4.187%. The 30-year bond yield increased more than a basis point to 4.836%. One basis point is equal to 0.01%, and yields and prices move in opposite directions.
In African space, trading activities reflected broader risk-off sentiment on the back of higher U.S. Treasury yields and cautious investor positioning followed comments from Powell confirming a cut-and pause, data-dependent approach.
The Fed signals reduced expectations for further easing and weakened appetite for higher-beta emerging market assets. The market speculation around Fed independence added to uncertainty, reinforcing defensive positioning; a Lagos-based investment firm AIICO Capital Limited said in a note.
Profit-taking was observed across the curve, while buying interest emerged in specific papers. Risk-off sentiment was observed across peer sovereigns, including Ghana, Kenya, and Angola.
The Nigeria Eurobonds traded mixed across the curve, leaving the average benchmark yield unchanged at 7.30%. Analysts said cautious trading activities would persist as market continue to react to oil price volatility and expected U.S. CPI data.
Oil prices held near a five-week high on Monday as concerns Iran may reduce exports during a crackdown on the biggest anti-government demonstrations in years offset expectations supplies could rise from Venezuela, another OPEC member under sanctions.
Brent crude gained a marginal 1 cent or 0.02%, to $63.35 per barrel, while U.S. West Texas Intermediate (WTI) eased by 8 cents or 0.14%, to $59.04.
However, gold hit a record above $4,600 per ounce on Monday, and silver reached a fresh peak as investors piled into safe-haven assets after uncertainty deepened over a Trump administration criminal probe into Federal Reserve Chair Jerome Powell.
The spot gold price climbed 237 bps to $4,617.16/oz, while U.S. gold futures followed with a 279 bps increase to $4,626.59/oz. Analysts expect markets to remain cautious and slightly risk-off, with safe-haven assets supported by geopolitical and policy uncertainty while investors await key data and central bank signals for further direction. UK Investment Companies to Grow on Private Asset Expansion
