Foreign Investors Pivot into US Dollar Bonds, Yields Ease
The average yields shifted in international markets as foreign investors pivoted into Nigerian sovereign US dollar bonds amid a global stock market rout led by a Wall Street downturn.
Trading activities in the international debt market were relatively bullish last week, with buying interest in African Eurobond issuers.
Oil prices moderated by 16% ahead of US President Donald Trump’s midterm election loss, with a Democrat win expected to bring peace to the Middle East.
The Nigerian Eurobond attracted investors’ attention as the government sought parliamentary approval to borrow more than $20 billion from external markets.
Traders also reported buying in some oil-linked issuers, led by interest in Angola US dollar bonds; Ghana and Egypt also saw Eurobond yields moderate.
Foreign asset managers’ risk position improved amid a sustained disinflation trend and expectations that the Apex Bank will continue cutting the policy rate to drive economic growth.
Buying interest was evident across the curve, with the FEB-28, FEB-30, and SEP-33 instruments attracting notable demand and posting price gains.
This broad based improvement in bond prices pushed the average Eurobond yield down 18 basis points to 7.07%, reflecting stronger investor confidence and a stronger appetite for Nigeria’s external debt instruments.
U.S. Treasury yields rose on Friday as investors assessed a stronger-than-expected October jobs report, which strengthened the case for another rate hike at next month’s Federal Reserve policy meeting.
The benchmark 10-year Treasury note yield increased more than 2 basis points to 4.864%. The long-dated 30-year Treasury bond yield climbed more than 1 basis point to 5.263%. Meanwhile, the 2-year Treasury note yield advanced more than 4 basis points to 4.522%. #Foreign Investors Pivot into US Dollar Bonds, Yields Ease# Nigeria’s 20-Year US Dollar Bond Yield Falls to 8.50%