Risk-off: High U.S. Treasury Yields Make Nigerian Eurobonds Unattractive
Risk-off: Nigerian Eurobonds traded under selling pressure as higher U.S. Treasury yields and profit-taking weighed on investor sentiment in the international debt market.
Top African issuers experienced significant profit-taking from offshore investors chasing high-yield dollar-denominated borrowing papers in the global markets.
The average yield on Nigerian sovereign Eurobonds edged higher by 3 basis points to 6.96% due to softer international appetite for Nigeria’s dollar-denominated debt.
This market direction is expected to remain driven by global interest rate expectations, analysts said, noting that global portfolio managers have started to price in US Fed rate hike into asset-return pricing.
The 30-year yield hit an intraday peak of 5.19% on May 19, 2026, its highest reading since the summer of 2007. As of July 22, 2026, it was sitting at approximately 5.14%, having climbed roughly 0.19 to 0.20 percentage points since mid-June.
US Treasury reacted to market expectations of an interest rate hike by the Federal Reserve following renewed tensions between Washington and Tehran.
Brent crude topped $100 per barrel while US WTI hovered around $96 due to renewed geopolitical supply concerns, while gold retreated on profit-taking, with commodity prices expected to remain volatile amid geopolitical developments and interest rate expectations.
The 10-year US Treasury yield on Thursday rose four basis points, to 4.71%, its highest level since January 2025. Prior to the war with Iran, which started in late February, the 10-year yield dipped below 4%.
High US rates will reduce the attractiveness of Nigerian Eurobonds, and this will push the sovereign dollar-denominated yield higher – meaning an increase in borrowing cost for the country from the international debt capital market.
In the local market, Federal Government of Nigeria bond yields declined as sustained buying interest across the curve, particularly at the short- and mid-tenor segments, supported market activity, with investor demand expected to remain firm.
