FPIs Trim Nigerian Eurobond Holdings, U.S Treasury Yield Steady
Foreign portfolio investors (FPIs) trimmed Nigerian sovereign Eurobond holdings at the international market in reaction to a flurry of global trade headlines. Traders pull back from ramping up as global uncertainties increase with tariffs and extra tariffs on countries that join BRICs by the U.S. administration.
Hence, the risk-off sentiment pushed the average yield on Nigerian sovereign US dollar-denominated papers upward by 10 basis points to 8.65%. The market witnessed sell-off pressure across the yield curve—most notably in the FEB 2038 Eurobond. On the other hand, the 10-year U.S. Treasury yield is steady amidst rising inflation.
Foreign investors have been showing interest in Nigerian Eurobonds, causing yield to drop below 9% as the macroeconomic landscape is gradually improving. Disinflation is gaining traction, foreign exchange (FX) liquidity has shown signs of recovery, and energy prices have remained relatively stable.
These factors—combined with a modest rebound in economic activity—have strengthened expectations for a gradual pivot towards monetary easing in the second half of 2025, according to Anchoria Securities Limited.
Yesterday, African Eurobonds traded mixed-to-lower following the U.S. inflation data. The latest U.S. consumer price index report showed limited signs of any tariff impact, but a rebound in inflation remains a headwind to U.S. stock and bond markets this year, Capital Economics’ James Reilly says in a note.
Headline inflation accelerated to 2.7% in June from 2.4% in May, reflecting tariffs effects ahead of full implementation. The yield on the US 10-year Treasury note held above 4.48% on Wednesday, remaining near a five-week high as investors awaited the latest producer price index data for further clues on the inflationary impact of the Trump administration’s tariffs.
Across global markets, investors are reacting to US President Donald Trump’s escalated trade threats against Canada, the EU, and Mexico while leaving negotiation doors open. Nigerian Eurobond yields climbed 10 bps to 8.65%, and analysts maintained that tariffs, inflation, and earnings will sway the Fed’s mid-July rate decision.
Markets overwhelmingly expect a pause. Recent past trading data reflected investors’ mixed and cautious trading activities in the African Eurobond space. Despite the noise about the tariffs, African Eurobonds, especially Nigerian papers, held steady with brief gains seen last week. #FPIs Trim Nigerian Eurobond Holdings, U.S Treasury Yield Steady Oil Prices Up as Demand, Supply Imbalance Influence Energy Cost
