The African Eurobond segment staged a notable recovery, reversing two consecutive sessions of profit-taking after the U.S. Federal Reserve lowered interest rates by another 25 basis points, marking its third straight cut and placing the benchmark band at 3.50%–3.75%.
With returns on U.S. dollar-denominated fixed-income assets becoming increasingly attractive relative to U.S. Treasuries, global portfolio managers intensified their hunt for higher yields across African sovereign debt. Issuers with significant oil exposure — including Nigeria, Angola, and Ghana — alongside Egypt, emerged as key destinations for foreign inflows.
Analysts noted that the renewed appetite was driven by the widening yield premium created by the Fed’s sustained dovish tone, which investors expect may extend well into 2026. However, U.S. policymakers simultaneously indicated that future easing would pause until clearer signals emerge from the labour market and inflation trajectory.
Market participants positioned early ahead of the FOMC announcement. Shorter-duration bonds softened, while intermediate and long-dated papers strengthened, resulting in a mild uptick in average benchmark yields.
According to AIICO Capital Limited, the improved trading sentiment led to yield compression across most African sovereign curves, pushing prices upward for several maturities.
Fixed income specialists reported that Nigerian Eurobonds maturing in 2032 and 2047 remained flat. In contrast, the 2027 paper saw its yield increase by 8 basis points to settle at 5.88%. As a result, Nigeria’s average sovereign yield declined by 1 basis point to 7.35%, with traders expecting upward movement in the short term following the reduction in U.S. borrowing costs.
Meanwhile, U.S. Treasury yields retreated after the Fed’s well-anticipated move. The 10-year benchmark slid to roughly 4.12%, marking its second consecutive decline as markets shifted focus back to incoming economic data.
