Nigerian Eurobonds, US Treasury Yields Diverge as Appetite Shifts
The Nigerian Eurobonds segment ended negatively, with average yields rising 4bps to 7.25%, reflecting reduced demand and cautious sentiment among global investors.
Foreign investors moved to buy US Treasury yields, while African issuers, including oil-linked sovereign notes, witnessed significant selloffs amid portfolio-balancing efforts.
The market for Nigerian Eurobonds ended on a downward note, marked by an uptick in average yields, which rose 4 basis points to 7.25%.
This shift reflects a noticeable decrease in demand for these US dollar-denominated financial instruments, as foreign investors express heightened caution toward the nation’s dollar-denominated sovereign debt.
Contributing to this sentiment is the overarching geopolitical uncertainty, particularly involving tensions between the United States, Israel, and Iran.
These global developments have cast a shadow over investor confidence, leading to a more risk-averse attitude toward Nigerian Eurobonds during this trading period.
The US 10-year Treasury yield moved back to 4.27% on Friday, hovering near four-week highs after briefly falling earlier in the session, amid escalating tensions with Iran.
Defense Secretary Hegseth told reporters that the US would carry out its largest wave of strikes yet against Iran on Friday. Oil prices also recovered after an early decline, remaining near their highest levels since 2022.
The benchmark US yield is up nearly 13bps this week, amid mounting concerns about an energy-driven inflationary spiral and fiscal imbalances linked to war-related spending.
The Federal Reserve will decide on monetary policy next week and, although no changes to the federal funds rate are expected, markets will closely watch for clues about policymakers’ outlook for the remainder of the year. Investors are currently pricing in only one rate cut by the Fed in 2026. Naira Closed at N1366 after FX Market Interventions
