Riskoff Provokes Nigerian Eurobond Yield Surge
With riskoff sentiment, investors selloffs significantly impacted Nigeria’s sovereign Eurobond market, fuelling bearish sentiment and driving yields higher across the curve, according to Cowry Asset Limited. The sell pressures emerged despite the fact that Nigeria’s settlement of $3.4 billion COVID-19 support from the International Monetary Fund (IMF) in 2020.
Foreign portfolio investors, and other market players have continued to weigh the impacts of latest disinflation after the rebased consumer price index, which analysts projecting inflation rate could pause the monetary policy committee from cutting benchmark interest rate in May.
Fixed income market analysts said the Mar-2029, Feb-2032 and Sep-2033 issuances were the most affected, contributing to a 6 basis point increase in the average yield, which rose to 10.37%. On Thursday, Eurobonds closed mixed-to-weaker after the Fed held rates at 4.25%-4.50%, citing stagflation risks that reduced rate cut expectations.
Other African eurobonds paper face the same experience, including Angola and Ghana. Nigeria’s curve underperformed, with average yields rising again as foreign portfolio investors rotated out from holding the asset. Buying interest emerged despite positive trade rhetoric from President Trump, who suggested a potential China deal and tax cut extensions could boost markets.
The Fed’s cautious stance outweighed optimistic trade comments during the session, according to AIICO Capital Limited. Market sentiment is likely to stay mixed with a bearish bias in the near term as U.S.-China trade negotiations progress, analysts said. #Riskoff Provokes Nigerian Eurobond Yield Surge Money Market Rates Mixed as Banks Put Excess Cash with CBN
