African Eurobond markets traded on a mildly bearish footing as elevated U.S. Treasury yields pressured emerging-market debt, prompting investors to reassess the timing of potential interest rate cuts by the U.S. Federal Reserve.
Debt market analysts noted that profit-taking emerged across multiple maturities, as investors moved to lock in gains amid growing uncertainty over the global economic outlook. The cautious tone was further reinforced by renewed geopolitical and trade-related tensions.
Investor sentiment was dampened after the United States revived tariff threats against the European Union and the United Kingdom, reigniting concerns about potential trade disruptions. Market participants fear that escalating trade frictions could weigh on global growth and reduce appetite for risk assets.
In response to U.S. pressure, European officials have signalled plans to impose retaliatory tariffs, a development analysts describe as increasingly confrontational. This has fuelled speculation of a broader “sell America” trade, with early indications suggesting some affected economies may be trimming their holdings of U.S. government debt.
Such moves have contributed to upward pressure on U.S. Treasury yields, forcing the Treasury to offer higher returns to attract investors back into its auctions.
African oil-linked sovereign issuers faced notable selling pressure as global investors shifted toward perceived safe-haven assets amid heightened uncertainty. Bonds from Angola, Egypt, and Ghana were among those affected, with similar pressures spilling over into Nigeria’s Eurobond curve.
Selling activity was evident across Nigerian Eurobond maturities, pushing yields higher. The November 2027 Nigeria Eurobond saw its yield rise by seven basis points to 5.70%. Mid-curve bonds, including the March 2029 and January 2031 issues, widened by four basis points and six basis points to 6.21% and 6.72%, respectively, according to an investor note from AIICO Capital Limited.
Longer-dated instruments were not spared. The September 2051 Eurobond closed with yields up four basis points at 8.54%, reflecting sustained weakness in long-term foreign-currency debt.
Overall, Nigeria’s Eurobond market posted mild losses, with average benchmark yields increasing by five basis points to 7.27%. Analysts attributed the move to subdued foreign investor demand, particularly for longer-tenor securities.
Market participants expect cautious sentiment to persist in the near term as investors closely monitor global macroeconomic indicators and shifts in risk appetite. Analysts say the direction of African Eurobonds will depend largely on upcoming economic data releases and developments in global trade and monetary policy.
Meanwhile, U.S. Treasury yields surged on Tuesday as renewed tariff threats from Washington reignited fears of a transatlantic trade conflict. The benchmark 10-year U.S. Treasury yield climbed to its highest level in months, last trading more than six basis points higher at 4.295%.
Longer-dated yields also spiked, with 20-year and 30-year Treasury yields rising by around eight basis points to 4.878% and 4.92%, respectively, underscoring the scale of investor unease across global bond markets.
