Nigeria’s Eurobond yields rose on Monday as foreign portfolio investors trimmed positions across African sovereign debt amid renewed risk-off sentiment in global markets.
Papers from Ghana, Angola, and Egypt also came under selling pressure, with prices falling and yields climbing as investors reassessed risks against a backdrop of international uncertainties. Analysts, however, noted that trading could reverse later in the week as new macroeconomic data emerge.
The move came despite expectations of stronger demand for Nigerian Eurobonds following a 34-basis-point moderation in headline inflation to 21.88% year-on-year in July, marking the fourth consecutive month of disinflation driven largely by base effects.
Still, Nigeria’s dollar-denominated bonds remained under pressure, with notable selloffs in the NOV-2027 note, which lifted average yields by four basis points to 8.00%. The broader African Eurobond market has struggled to shake off bearish momentum, despite higher oil prices, as investor optimism over a September U.S. Fed rate cut has faded.
AIICO Capital Limited, in a market note, said yields are likely to remain elevated, given weaker-than-expected macroeconomic indicators.
Last week, African Eurobonds traded mixed. Markets opened on a positive tone, buoyed by a 25-basis-point interest rate cut by the Bank of England and expectations of a Fed easing cycle. But sentiment soured midweek after U.S. inflation data—July CPI holding at 2.7% and stronger-than-expected PPI—dampened Treasuries and sparked a selloff across sovereign bonds.
By the weekend, Nigerian Eurobonds still managed to post gains, with average mid-yields falling 20 basis points to 7.84%. Strong demand supported the Mar-2029 note, where yields fell 25 bps to 7.12%, and the Feb-2030, down 24 bps to 7.42%.
Investors are expected to trade cautiously this week while monitoring geopolitical developments, including the anticipated meeting between U.S. President Donald Trump and Russian President Vladimir Putin.
