The average yield on Nigerian government fixed interest securities instruments slid over renewed interest by local investors. Buying interest in the secondary market dragged the average yield lower by 1bp to 15.8% in the OMO segment.

In Nigeria’s sovereign Eurobonds (US dollar bonds) market, activity level was dominantly in the bullish region as positive sentiments pervaded the movement in yields. Foreign investors in the international market pushed demand higher as US Treasury yield reversed.

According to market data, the 2-year US treasury yield declined 0.023 percentage points to 5.037%. This was the largest one-day yield decline since Tuesday, Nov. 7, 202.

The movement snapped a three-trading-day streak of rising yields Yield is off 0.181 percentage points from its 52-week high of 5.218% hit Wednesday, Oct. 18, 2023

Market reports suggest that US bonds are not in sync with investors’ requirements like in the past amidst US Fed rate hikes and weakening risk sentiment.

Following Moody’s US credit outlook downgrade to negative, U.S. two-year yields, which reflect interest rate expectations, fell 3.1 basis points to 5.03%

MarketWatch reported that Foreigners, particularly the governments of China and Japan, are no longer buying as they once did. The Fed, another former buyer, is now selling vast amounts of Treasury.

Meanwhile, the federal government is on a “borrowing bender,” Strauss and his fellow managers wrote, “raising $1.7 trillion in 2023 [to date], up a whopping 80% versus 2022.”

As a result, foreign investors rotate around Nigeria’s sovereign Eurobonds or US  dollar bonds in a bid to optimse portfolios.  Then, the average yield in the market inched lower by 3 basis points to close at 11.46% due to bullish buy interest.

Meanwhile, The secondary market for FGN Bonds remained quiet on Monday as the average yield across the short, mid and long of the curve stayed muted at 15.67% from the prior close.

In the foreign exchange market, the Naira depreciated at the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, closing at N795.41 per dollar. Consequently, In the parallel market, the Naira also depreciated by 1.79% to N1,140 per dollar. Investors Stake N653bn on Nigerian Sukuk -DMO