The average yield on Nigerian sovereign Eurobonds declined in the global market as foreign portfolio investors expanded their positions, reflecting a shift in sentiment towards risk assets.
Renewed interest from foreign investors has driven down yields on Nigerian Eurobonds, coinciding with changes in U.S. Treasury yields that have encouraged appetite for emerging market debt. This wave of bargain hunting marks a reversal from previous cautious trading patterns, underscoring the evolving global market dynamics and the growing appeal of Nigerian assets.
MarketForces Africa reported sell pressures on U.S. Treasury notes, with the 2-year yield rising by 1 basis point to 3.874%, the 10-year yield gaining nearly 2 basis points to 4.363%, and the 30-year yield climbing 2.5 basis points to 4.885%. Despite a successful 30-year bond auction, the upward pressure on yields reflected continued caution among investors.
Elsewhere, the UK’s 10-year gilt yield edged down to 4.59% as markets increasingly priced in a potential rate cut by the Bank of England in August, despite inflation remaining above 3%. Recent UK economic data pointed to further weakness, with GDP shrinking 0.1% in May after a 0.3% contraction in April.
On Thursday, the Nigerian Eurobond market closed on a bullish note, supported by strong investor demand across the yield curve. Notably, significant buying interest in the FEB-2032 bond contributed to market performance, leading to an 8-basis-point drop in average yields to 8.50%, according to a note from Cowry Asset Limited.
Broader African Eurobonds also advanced as U.S. jobless claims fell to 227,000, signaling a resilient labor market even as Fed rate cut expectations for July moderated. Meanwhile, investors continue to monitor developments around potential U.S. trade agreements with the EU, India, and Canada, although uncertainties persist following new tariff threats on BRICS nations.
