Nigeria’s Eurobonds Yield Rises 7bps after U.S Inflation Jumps
Average yield on Nigerian Eurobond rose by 7 basis points (bpd) as foreign portfolio investors trimmed down their interest in the international market trading platform as sentiments wane.
The portfolio rebalancing started after U.S. inflation surged by 20 basis points to 2.6% in October, sending a mixed signal on Federal Reserve rate cut outlook. In Nigeria’s sovereign Eurobonds segment, the market saw increased sell pressure across the short, mid, and long ends of the yield curve.
The trading pattern laced with riskoff sentiment and other market-related uncertainties pushed the average yield up by 0.07%, settling at 9.54%. Traders explained that the Eurobonds market continued its downtrend today, although there were some buying interests earlier in the day.
However, the buying sentiment diminished after the release of US inflation numbers. Core inflation remained steady at 3.3%, as anticipated, with monthly core inflation also holding at 0.3%, consistent with September’s figures.
This moderate inflation print reinforces expectations that the Federal Reserve will lower interest rates next month, with markets pricing a 79% likelihood of a 0.25% rate cut, according to the CME FedWatch Tool.
The average yields expanded to 9.58% towards the end of October 2024 before demand for Nigeria’s sovereign Eurobonds increased. Last month, the S&P/FMDQ Nigerian sovereign bond index returned -0.30% from 3.77% in September, Meristem Securities Limited said in a note. #Nigeria’s Eurobonds Yield Rises 7bps after U.S Inflation Jumps FX Stability: CBN Sells 122.671m Dollars to 46 Authorised Dealers
