Nigeria’s Sovereign Eurobond Yield Falls Below 10%
The average yield on Nigerian Eurobond fell below 10% as foreign portfolio investors increased interest in the international capital market.
In the US, the yield on 10-year Treasury note continues to track below 4% amidst declining consumer price index.
Analysts predict that African markets will see influx of hot monies on sovereign assets with good yield in the coming month after US Fed rate cuts.
On Nigerian sovereign Eurobond, the buying momentum followed an expectation that inflation will recede for the rest of the year at the time that the market anticipates US Fed rate cut.
Last week, the buying interest at the short, mid and long ends of the yield curve led to a 0.08% decrease in the average yield to 9.95%, Cowry Asset Limited told investors.
Traders observed that activity was bearish at the start of the week after the US headline inflation dropped to 2.5% from 2.9%.
African bonds saw positive movement. Nigeria and Angola bonds both saw their prices increase. As a result, the average mid-yield on the Nigerian curve dropped.
In the new week, all eyes will be on the FOMC meeting as investors anticipate whether the Fed will decide on a 25 or 50 basis point rate cut.
According to the Bureau of Labor Statistics (BLS), headline inflation in the United States slowed by 40bps to 2.5% in August from 2.9%, marking the lowest printed since February 2021 when it settled at 1.7%.
This paved way for fed fund rates cut and Moody’s investors’ services has predicted 50 basis points reduction for Sept. # Nigeria’s Eurobond Yield Falls Below 10%. #Nigeria’s Sovereign Eurobond Yield Falls Below 10%
