Foreign Investors Raise Bet on Nigeria Eurobonds
In Nigeria’s sovereign Eurobonds market, there was a positive level of activity. Foreign investors increased their bets on Nigeria’s US dollar bonds at the international capital market for trading sovereign assets.
As a result, Nigeria’s Eurobond price surged, dragging the yield curve down. The market turned bullish from the previous risk-off sentiment displayed on Nigeria’s sovereign assets due to uncertainties in the economy.
According to the debt market report tracked, yields on U.S. government debt settled nearly flat on Wednesday afternoon after a $42 billion auction of 10-year notes drew solid demand.
The yield on the 2-year Treasury rose 1.4 basis points to settle at 4.420%, from 4.406% on Tuesday. The yield on the 10-year Treasury was up 1.7 basis points to end at 4.108%, versus 4.091% on Tuesday.
The yield on the 30-year Treasury advanced 1.3 basis points to settle at 4.309%, from 4.296% on Tuesday. Buy sentiment was evident across all ends of the yield curve, leading to a decline in the average yield by 16 basis points to 9.93%, Cowry Asset Limited said in an update.
At its latest policy meeting, the US FOMC kept the Fed funds rate unchanged at 5.25% – 5.5%, and the US Fed signal rate cut may be impracticable in the short term.
The committee pushed back against market expectations of rate cuts in March 2023, stating that rates a likely to remain elevated until they have gained greater confidence that inflation (currently 3.4%) is moving sustainably toward the 2% target.
Looking ahead, the committee stated that it would be prepared to adjust the stance of monetary policy if risks that could impede the attainment of its goals emerge. In the secondary market for FGN Bonds, trading on Wednesday exhibited slight bullish results. The average yield declined by 2bps to close at 15.30%. #Foreign Investors Raise Bet on Nigeria Eurobonds#
