Average Nigeria’s Eurobond yield declined to 9.13% on Tuesday, February 4, 2025, down from 9.21% recorded the previous day, marking a 7.76 basis points (bps) decrease.
This is according to data from the Debt Management Office (DMO).
This marks the lowest yield level in nearly 39 days, with the last instance of a lower average yield recorded on December 11, 2024 (9.095%).
The decline reflects renewed investor demand for Nigerian Eurobonds, driving prices higher and yields lower.
Investor interest was broad-based across the yield curve, with shorter-dated maturities experiencing the sharpest declines. The November 2025 bond saw the most significant drop, falling by 15.6bps, indicating a strong preference for near-term securities.
Meanwhile, mid-tenor bonds like the January 2031 also saw significant buy interest as the yield dropped by 12.4bps to 9.096%. This is despite the decision of the US Federal Reserve to maintain its interest rate in the region of 4.25% to 4.50% in line with market expectations.
The recent bullish sentiment in Nigeria’s Eurobond market can be attributed to a combination of global and domestic factors, driving increased investor demand and a subsequent decline in yields.
One major global factor influencing the market is the launch of China’s DeepSeek, a development that has disrupted the U.S. market. The emergence of this AI powerhouse has intensified competition in the sector, leading to capital losses for the Magnificent Seven—the dominant U.S. tech giants—as investors reassess their positions in the evolving AI landscape. This shift has prompted a rotation of funds, with some investors seeking alternative assets, including emerging market debt like Nigeria’s Eurobonds.
Additionally, the inauguration of President Donald Trump as the 47th President of the United States has also played a role in shaping market sentiment. Trump’s historical preference for low-interest-rate policies has fueled expectations of a more accommodative monetary environment, potentially leading to lower yields on U.S. Treasuries. In turn, this has boosted demand for higher-yielding emerging market bonds, including Nigeria’s, as investors look for attractive returns.
According to Victor Onyema, the Head of Investment at Norrenberger Asset Management Limited (NAML), the bullish trend in the market is driven by a combination of factors. “The inauguration of President Trump has fueled some capital redirection to emerging markets like Nigeria, as investors seek higher-yielding instruments in emerging market. Also, the bearish performance in the equities market has given opportunity for investors to rotate their portfolio and allocate funds into high yielding risk-free instruments, he said.”
Optics
Despite expectations of only one interest rate cut in the US in 2025, aggressive policies from the President Trump administration, including trade disputes with China, Canada, and Mexico, have also influenced movements in the Eurobonds market. These policies have created uncertainty and volatility in global markets, leading to shifts in investment flows and impacting yields on various financial instruments.
