Selloffs Push Nigeria US Bonds Yield Higher by 9bps
Nigeria’s US dollar bonds or Eurobonds saw a spike in benchmark yield due to selling rallies at the international capital market. The sovereign US dollar bond prices adjusted downward as investors offloaded their books.
Some market analysts had projected that yield on Nigeria Eurobonds will rise sharply following the Central Bank of Nigeria’s (CBN) directive that deposit money banks reduce their net open positions.
Still, Nigeria’s borrowing instrument remains attractive to foreign portfolio investors as the US Fed continues to maintain the status quo on interest rates. Fed funds have been relatively stable for months while US Treasury yield moves with market appetite.
Yields on U.S. government debt finished mostly lower on Tuesday as a risk-off tone enveloped markets after investors returned. The yield on the 2-year Treasury fell 4.4 basis points to 4.610%, from 4.654% on Friday. Yields move in the opposite direction to prices.
The yield on the 10-year Treasury slipped 1.8 basis points to 4.276%, from 4.294% on Friday. Two- and 10-year rates are each down for three of the past four trading sessions but finished at their third-highest levels of the year. Court Orders FCMB to Deposit N540m Defamation Damage Awarded to Prophet Omale
In Nigeria’s sovereign Eurobonds market, negative sentiment prevailed across all segments of the yield curve, causing a 9bps increase in the average yield to 9.79%. There was increased demand at the local market yesterday after a failed bond auction raise.
Traders said the secondary market closed on a bullish note, as the average yield dipped by 4bps to 16.2%. Across the benchmark curve, the average yield declined at the short (-14bps) end as investors showed interest in the MAR-2024 (-83bps) bond.
Meanwhile, the average yield was unchanged at the mid and long segments. #Selloffs Push Nigeria US Bonds Yield Higher by 9bps
