In Brief
- Bond yields climb: T&T sovereign bonds are facing upward yield pressure, driven by a global fixed-income selloff and surging U.S. Treasury yields rather than local credit issues.
- Energy sector boost: The medium-term outlook for T&T’s energy sector is improving, with the National Gas Company (NGC) securing key commercial agreements for the Aphrodite, Coconut, and Manakin fields.
- Global market resilience: U.S., European, and Japanese equities advanced this week, largely shrugging off the pressures of multi-decade high Treasury yields and elevated oil prices.
- Local liquidity surges: Domestic financial system liquidity in T&T improved substantially, creating a supportive environment for upcoming local bond issuances.
Trinidad and Tobago’s U.S. dollar sovereign bonds came under renewed yield pressure this week as the global fixed-income selloff pushed U.S. Treasury yields sharply higher. The T&T 2030 bond was offered to yield 6.08% and the 2036 around 6.56%. The move largely reflects the repricing of global risk-free rates rather than a material deterioration in Trinidad and Tobago’s underlying credit profile. U.S. Treasury yields ended the week at approximately 4.90% for the 10-year and 5.51% for the 30-year, materially raising the yield investors require from Caribbean sovereign credits.
Against this less favourable global interest-rate backdrop, the outlook for Trinidad and Tobago’s energy sector is becoming more constructive. NGC announced this week that it had finalised commercial agreements with Shell for the Aphrodite project, where first gas is anticipated in the second quarter of 2027, and separately executed a binding term sheet to acquire 50% of the gas volumes from the Coconut development, which is expected to begin production in the first quarter of 2027. NGC also recently acquired a 20% participating interest in the Manakin field. These developments should strengthen domestic gas availability and, if they translate into higher downstream production and LNG-related exports, could improve future foreign-exchange earnings and USD liquidity. The timing and scale of that impact, however, will depend on production increases, export volumes, and energy prices.
United States – Equities advance despite higher bond yields
U.S. equities remained resilient despite substantial volatility in fixed income. The supplied market data showed the S&P 500 gaining approximately 1.23% over five days, the Nasdaq Composite rising approximately 2.06%, and the Dow Jones advancing modestly. Technology remained supportive, with Apple and Nvidia higher over the period, while Meta posted a strong five-day gain despite weakness late in the week.
The bigger story remained bonds. The accompanying market report showed Treasury yields rising to multi-decade highs amid concerns over elevated oil prices, persistent inflation, heavy government borrowing, and continued capital spending. The 10-year Treasury was quoted above 5% in parts of the market, placing pressure on longer-duration assets and raising financing costs globally.
Energy markets also remained important. Brent crude was around US$104 per barrel, keeping inflation risks elevated even as oil eased from recent highs. Higher oil prices benefit energy-exporting economies, but they also complicate the inflation and monetary policy outlook.
UK and Europe – Markets show resilience
The FTSE 100 gained approximately 0.34% over five days, while the FTSE 250 rose around 0.23%. European markets were also moderately positive; the Euro Stoxx 50 advanced approximately 1.07%, Germany’s DAX gained 0.41%, while France’s CAC 40 was broadly flat.
European markets continue to balance relatively resilient corporate earnings against higher global yields and energy costs. Energy companies such as Shell performed comparatively well over the five-day period, reflecting continued support from elevated crude and gas prices.
Asia – Japan leads, China remains mixed
Asian performance was uneven. Japan was the standout, with the Nikkei 225 gaining approximately 4.54% over five days and the broader JPX Nikkei 400 advancing more than 2%. Hong Kong’s Hang Seng declined approximately 0.97%, while Shanghai gained around 0.33%.
The divergence highlights continued investor preference for Japanese equities alongside more cautious sentiment toward China, where investors remain focused on domestic growth, property market conditions, and policy support.
Pan-Caribbean – Higher global rates feed through to bond pricing
Caribbean USD bonds continue to offer significant yield premiums over U.S. Treasuries. Jamaica’s 2036 was offered around 5.85% and the 2045 around 6.58%. Barbados’ 2035 was offered around 7.04%, while Dominican Republic bonds ranged from roughly 6.2% to above 7% across intermediate and longer maturities.
Within Trinidad corporate credits, NGC 2036 was offered around 7.05%, Trinidad Generation 2033 around 6.82%, and Heritage Petroleum 2029 around 6.02%.
Trinidad & Tobago – Strong liquidity supports upcoming issuance
Domestic financial-system liquidity improved substantially this week. Commercial banks ended with approximately TT$5.93 billion of excess reserves, up TT$1.81 billion from TT$4.12 billion the previous week. Only TT$130 million of OMO and debt-auction maturities occurred during the week.
This liquidity position is important given the pipeline of new local bond issues expected over the coming weeks. High excess reserves should provide a supportive technical backdrop for well-structured TTD issues, particularly from stronger government and investment-grade corporate credits. However, issuers cannot ignore the sharp rise in global USD yields.
The local equity market was more active, with TT$50.5 million traded, although the Composite Index fell 0.92%. Much of the volume was concentrated in Massy Holdings, which accounted for approximately 90% of shares traded.
Trinidad and Tobago enters the final quarter with an unusual combination of higher global borrowing costs but improving domestic liquidity and a more encouraging medium-term gas outlook. For new bond issuers, that should mean reasonable access to local capital, but with investors increasingly focused on credit quality, maturity, and pricing.
About the author: Dave Dookie is the Managing Director of Waterloo Capital Advisors Limited, a Trinidad and Tobago-based financial advisory firm specialising in investment management, capital markets, and structured finance. He has advised governments, financial institutions, and energy companies on debt issuance, project financing, and strategic capital raising across the Caribbean. He holds degrees and advanced qualifications from the London School of Economics and Political Science (LSE) and the University of London, and has completed advanced training in data science through the MIT Applied Data Science Programme.
