May 11, 2026/Cordros Report
April saw global fixed income markets contend with a difficult mix of geopolitical risk, resurgent inflation, and policy uncertainty. The Middle East conflict remained the key overhang — keeping energy prices elevated, feeding inflation across developed and emerging markets, and further constraining the scope for near-term monetary easing. In the US, conditions remained broadly stagflationary. Stronger PCE and CPI prints, alongside distorted GDP growth, led the Federal Reserve to hold the policy rate at 3.50%–3.75% at its April meeting, reflecting a cautious stance amid rising inflation risks. An unusual four-way FOMC dissent and the expected transition to Kevin Warsh add another layer of uncertainty heading into Q2-26.
Across Africa, the energy shock similarly narrowed policy flexibility, with central banks prioritising inflation control and FX stability over growth. Nonetheless, SSA Eurobonds rebounded in April, supported by easing risk sentiment and compelling yields. In Nigeria, the fixed income market was mixed. NTBs rallied on robust liquidity and strong auction demand, while FGN bond yields edged higher amid weak offshore participation and sustained supply. Liquidity conditions, though easing at the margin, remain the primary near-term anchor for the market.
Meanwhile, a higher-for-longer global policy backdrop should keep US yields elevated, while underpinning demand for high-yield SSA Eurobonds amid improving risk sentiment. Domestically, yields will track liquidity and supply dynamics, with strong system liquidity likely to limit sustained upward pressure.
