US Fed rate hike puts pressure on emerging market assets

The domestic bond market performance was bearish during the week as average yield across all instruments rose 20 basis points to close at 13.3 per cent week on week (W-o-W).
The week started off bearish as average yield increased by 30 basis points to 13.4 per cent from 13.
1 per cent to close the previous week.
The trading result showed that by Tuesday, the market gained 10 basis points as average yield declined to 13.3 per cent.
This was sustained till Thursday, the last trading session, with average rate closing at 13.4 per cent for the week.
Financial analysts expect the yield environment to continue to soften, especially in the light of moderating inflation.
They also anticipate the possibility of increased investor appetite for longer tenored instruments driving sentiment in the coming week.
The Nigerian Sovereign Bond yield curve is currently transitioning towards normality with its humped shape on the term structure of interest rate signaling higher yields on mid-term to maturity than the long dated instruments.
The analysts were of the view that in the near term, most trades will likely concentrate around the longer end of the yield curve as it presents the highest return possible with moderating yields.
Across the Sub Saharan Africa Sovereign Eurobond market, performance was largely bearish as yields on 26 of 29 instruments trended higher Week-on-Week.
This bearish performance follows weeks of sell offs witnessed across the SSA market driven majorly by the stronger dollar as well as the Wednesday’s rate hike (a quarter of a percentage point) by US Fed from a range of 1.5-1.75 per cent to 1.75- 2.0 per cent .
Consequently, the US government 10-year bond average yield traded bullish 1basis points lower to 2.93 per cent as investor appetite shifted towards safer treasury instruments.
The average yield across Nigerian, Ghanaian, Gabonese, Ivorian, Kenyan, Senegalese and South African instruments rose 2bps, 15bps, 60bps, 20bps, 5bps, 27bps and 3bps Week-on-Week.
However, Zambian instruments recorded 19bps Week-on-Week moderation in yields.
NIGERIA 2018 witnessed the most sell-offs in the week following a 1.7 per cent rise in yield while GABON 2024 recorded the most buy interest as yield on the instrument tapered 60bps Weekon-Week.
The Nigerian Corporate Eurobond Market’s performance was equally bearish as investors’ continuous exit from emerging and frontier assets also filtered into the corporate space.
Yields on all instruments, save the Guaranty 2018, advanced Week-on-Week.
Access 2021witnessed the most sell pressures, up 1.1ppts to 7.9 per cent Week-on-Week while Guaranty 2018 enjoyed buying interest in the week, down 7 basis points to 3.5 per cent.
However, Year till date Diamond 2019 is the best performer, up 4.4 per cent.
Analysis expect the bearish performance in the SSA Eurobond market to linger in the near term as investors shift focus to dev