Nigeria’s Eurobond market closed on a bearish note as average yields rose by three basis points to 7.77%, reflecting cautious investor sentiment amid evolving macroeconomic dynamics.
Earlier disinflationary trends, which pushed Nigeria’s real interest rate to 7.38%, had initially attracted offshore interest in the country’s dollar-denominated securities. However, market reactions shifted as global conditions evolved.
Internationally, African Eurobonds traded mixed to bearish after the U.S. Federal Reserve announced its first interest rate cut of 2025. The Fed lowered its policy rate by 25 basis points as widely anticipated, citing the need to support employment and counter slowing economic growth.
Fed Chair Jerome Powell described the cut as a “risk management move,” downplaying inflation risks while signalling the possibility of two additional reductions before year-end.
The decision, however, sparked debates over the Fed’s independence, particularly following President Trump’s controversial appointment of Stephen Miran, who dissented in favour of a deeper 50 bps cut.
Following the policy shift, Nigerian Eurobond yields rose modestly, with analysts noting that some profit-taking was expected since investors had already priced in the Fed’s move.
Meanwhile, U.S. Treasury yields edged lower after the rate cut. The two-year Treasury yield dropped to 3.537%, the 10-year to 4.063%, and the 30-year to 4.657%, according to Tradeweb data.
In the commodities market, oil prices slipped, pressured by rising U.S. diesel inventories. Brent crude shed 25 cents to $68.22 per barrel, while WTI lost 21 cents to $64.31.
Conversely, gold surged to a record high before paring gains. Spot gold touched $3,707.40 before closing at $3,681.39, while U.S. futures for December settled at $3,717.80.
Analysts suggest that Nigerian Eurobonds may continue to trade with mixed sentiment in the near term, balancing optimism from domestic reforms with cautious global market positioning.
