Nigeria US Dollar Bond Yield Falls to 10.4%

Trading activities on the Federal Government of Nigeria’s US dollar bond ended on a bullish note as foreign investors in the international market ramped up the sovereign Eurobonds across maturities.

Similar scenarios were witnessed in the local market after the debt office conducted the last primary market auction for the year at lower spot rates. Bondholders in the international market are having fun with Nigeria’s US dollar bond with double-digit returns as the government continues to position the economy for various reforms.

While Nigeria’s hot red inflation is expected to worsen ahead of the data release, the market expects the monetary authority to hike the rate further. The Central Bank of Nigeria (CBN) has suspended its policy committee meeting twice after the new chief was announced.

The interest rate hike was deployed to combat the inflation trend since the first quarter of 2022. Despite this, price instability has not just persisted, but worsened without an end in sight. >>  Naira Devaluation Deepens Economic Crisis in Nigeria

In Nigeria’s sovereign Eurobonds market, buy sentiment prevailed across the short, mid and long ends of the yield curve, causing a 7bps decline in the average yield to 10.41%, Cowry Asset Limited said in an update.  

In the bond market, trading activity was positive as buy interest was observed at the longer end of the yield curve and as a result, the average yield retreated by 8bps to close at 14.78%.  

U.S. Treasury yields slid on Tuesday, before cutting losses, after data showed underlying inflation in the world’s largest economy came in line with forecasts. This reinforces views the Federal Reserve will hold rates steady after its two-day policy meeting on Wednesday.

The benchmark U.S. 10-year yield dropped as low as 4.15% following the report. It was last at 4.215%, down 2.3 basis points (bps). U.S. 30-year yields turned lower after a 30-year bond sale came out much better than last month’s dreadful auction.