As foreign investors increased their purchases of sovereign Eurobonds across maturities in the global market, trading activity on the Federal Government of Nigeria’s US dollar bond concluded on a positive note.
Following the debt office’s final primary market auction of the year at reduced spot rates, similar situations were seen in the local market. Nigeria’s US dollar bond, which has double-digit returns, is a hit with foreign bond buyers as the government continues to set up the economy for different changes.
The market anticipates that the monetary authority will raise interest rates even if Nigeria’s hot red inflation is predicted to deteriorate prior to the data release. The policy committee meetings of the Central Bank of Nigeria (CBN) were twice halted following the appointment of a new head announced.
The interest rate hike was deployed to combat the inflation trend since the first quarter of 2022. Despite this, price instability has not just persisted, but worsened without an end in sight.
In Nigeria’s sovereign Eurobonds market, buy sentiment prevailed across the short, mid and long ends of the yield curve, causing a 7bps decline in the average yield to 10.41%, Cowry Asset Limited said in an update.
In the bond market, trading activity was positive as buy interest was observed at the longer end of the yield curve and as a result, the average yield retreated by 8bps to close at 14.78%.
U.S. Treasury yields slid on Tuesday, before cutting losses, after data showed underlying inflation in the world’s largest economy came in line with forecasts. This reinforces views the Federal Reserve will hold rates steady after its two-day policy meeting on Wednesday.
The benchmark U.S. 10-year yield dropped as low as 4.15% following the report. It was last at 4.215%, down 2.3 basis points (bps). U.S. 30-year yields turned lower after a 30-year bond sale came out much better than last month’s dreadful auct
Nigeria US Dollar Bond Yield Drops To 10.4%
