Nigeria’s dollar bonds, naira drops after Trump's military action, aid cutoff threats

Nigeria’s dollar bonds fell hard on Monday, taking the worst losses across emerging markets after President Donald Trump warned that the United States could cut aid and consider military action if the Nigerian government does not stop the killings of Christians by Islamist militants.

In a post on Truth Social yesterday, Trump said:-

“If the Nigerian Government continues to allow the killing of Christians, the U.S.A. will immediately stop all aid and assistance to Nigeria, and may very well go into that now disgraced country, “guns-a-blazing,” to completely wipe out the Islamic Terrorists who are committing these horrible atrocities. I am hereby instructing our Department of War to prepare for possible action. If we attack, it will be fast, vicious, and sweet, just like the terrorist thugs attack our CHERISHED Christians! WARNING: THE NIGERIAN GOVERNMENT BETTER MOVE FAST!”

All ten of the worst-performing EM sovereign dollar bonds at 9:50 a.m. in Lagos were Nigerian, according to Bloomberg data. The 2047 note posted the sharpest decline, falling 0.6 cents to 88.26 cents on the dollar.

President Bola Tinubu rejected Trump’s remarks, saying the statement ignored, in his words, “the consistent and sincere efforts of the government to safeguard freedom of religion and beliefs for all Nigerians.”

The selloff did not slow. Nigeria’s currency also weakened, with the naira dropping 1.2% to ₦1,442.80 per dollar, marking its sharpest intraday decline since June and the largest fall among emerging-market currencies Monday.

Nigeria markets respond to U.S. pressure

Nigeria remains Africa’s most populous country and a major OPEC crude producer, and any indication of instability tied to religion or security tends to pull foreign investors to the exit.

Bola Tinubu’s response did not reverse sentiment. Traders working dollar-denominated government debt in London, New York, and Johannesburg reported heavy early-session selling, particularly in longer-dated maturities.

The market reaction showed how political messaging from Washington can immediately reposition global funds out of Nigeria’s risk asset space.

The drop in the naira reinforced the pressure. A 1.2% move in a single day is notable in a sovereign FX market, especially given the tight liquidity conditions Nigeria has faced. The fall reflected both local uncertainty and a broader retreat from EM currencies Monday.

Global markets move: tech rises, gold falls, currencies shift

Meanwhile, elsewhere in global markets, the tone was very different. U.S. equity futures were slightly higher as the week opened. S&P 500 futures rose 0.4%. Nasdaq-100 futures were up 0.6%. The Dow moved 0.1% higher.

Semiconductor stocks led the upside. Micron Technology gained 4%, while Nvidia and AMD each added about 1% in premarket trading.

The VanEck Semiconductor ETF (SMH) climbed 1% as traders continued rotating into large-cap tech. Meta Platforms and Palantir were also higher before the bell.

U.S. indices ended October stronger. The S&P 500 gained 2.3%, the Dow gained 2.5%, and the Nasdaq Composite rose 4.7% for the month.

Commodity markets told another story. Gold fell below $4,000 an ounce after China ended a tax rebate that many retailers had used when selling gold purchased through the Shanghai Gold Exchange and Shanghai Futures Exchange.

Spot bullion dropped as much as 1% in early Asia. Adrian Ash, director of research at BullionVault, said, “This news could prove very welcome to traders and investors hoping for a deeper correction after last month’s spike.”

Under the new policy, only exchange members selling investment-grade products will keep the full tax offset. Companies that are not members can now only deduct 6% of input value-added tax instead of 13%.

This affects jewelry production, industrial uses, and bar and coin producers outside the exchange network. Spot gold traded 0.5% lower at $3,984.43 in Singapore. Silver and palladium were lower, while platinum posted small gains.

Currency markets also shifted. The yen traded near 154.1 per dollar, sitting at an eight-and-a-half-month low. The euro was 0.16% lower at $1.1513, and the British pound was 0.4% lower at $1.3118.

The U.S. Dollar Index rose 0.16% to 99.89, reaching its highest level since August 1, while holding within its six-month trading band between 96 and 100.

Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program