Nigeria’s sovereign Eurobond yields moved higher last week as global investors adopted a cautious stance ahead of key inflation data releases, triggering renewed risk-off sentiment across emerging and frontier markets.
The benchmark Nigerian Eurobond ended the week on a bearish note, with yields climbing as offshore investors trimmed exposure amid expectations of a sharp uptick in domestic inflation. Analysts at Broadstreet have projected a notable acceleration in headline inflation, a development that could reinforce the Central Bank of Nigeria’s commitment to maintaining interest rates at elevated double-digit levels.
This inflation outlook has already begun influencing pricing across Nigeria’s fixed income landscape. Domestic yields have continued to reprice upward, a trend that market participants believe could spill over into Nigeria’s external borrowing plans, particularly its projected 2026 issuance calendar. The absence of clear signals around monetary easing has further amplified investor caution.
Throughout the week, trading in Nigerian sovereign Eurobonds remained under pressure, reflecting a combination of profit-taking activity, softer crude oil prices, and a generally subdued global risk environment. Early optimism—briefly supported by declining U.S. Treasury yields and improved global sentiment—proved short-lived.
Fresh concerns emerged over the pace and timing of potential U.S. interest rate cuts, as the Federal Reserve maintained a dovish tone while reiterating its data-dependent policy stance. This prompted a swift return to defensive positioning across global bond markets, including Nigerian Eurobonds.
Midweek sentiment weakened further as oil prices declined and market participants weighed the possibility of increased global supply, particularly from Venezuela. At the same time, U.S. labour market data showed initial jobless claims rising modestly to 208,000 from 200,000, suggesting a slight cooling in employment conditions.
Towards the close of the week, crude oil prices recovered on renewed concerns over potential disruptions to Iranian exports and continued uncertainty surrounding Venezuelan output. This rebound offered limited support to Nigerian Eurobonds, leading to mild yield compression in the final sessions.
Despite the late-week recovery, overall performance remained negative. According to data from AIICO Capital Limited, the average benchmark yield on Nigerian sovereign Eurobonds rose by 26 basis points week-on-week, settling at 7.30% by the end of the trading period.
