Global Market Updates:
The U.S. Federal Reserve Holds Rate Steady
The United States Federal Reserve (The Fed) on Wednesday kept its key interest rate unchanged for the third consecutive meeting as it awaits President Trump administration’s trade policies to take shape and see its impact on the economy.
In its post meeting statement, the Fed flagged growing concerns, “the risks of higher unemployment and higher inflation have risen,” and the Fed Chair, Jerome Powell said that it’s “not at all clear” what the central bank’s next move should be.
U.S. Stock Market
U.S. stocks saw modest gains earlier in the session, supported by renewed trade optimism after President Trump confirmed a U.S.-U.K. trade framework agreement and remarked that tariffs on China “cannot go higher and will come down.” This provided some encouragement ahead of US-China trade talks scheduled for this weekend in Switzerland.
However, major U.S. indexes closed fractionally lower overall. The Dow Jones fell 0.1%, the NASDAQ declined 0.3% and S&P500 slipped 0.4%.
Domestic Market Updates
Nigerian Stock Market
The Nigeria bourse advanced this week, with the NGX All-Share Index posting gains in all but one trading session, rising 2.54% week-on-week to close at 108,733.40 points. The bullish momentum was driven by strong interest in blue-chip stocks such as MTNN (+11.73%), DANGCEM (+1.85%), NESTLE (+10.0%), GTCO (+7.89%), and TRANSCOHOT (+5.86%).
Several stocks hit new 52-week highs, including MTNN (₦284.90), NESTLE (₦1,210.00), and TRANSCOHOT (₦157.50). Meanwhile, GOLDBREW was suspended due to delayed filings, while dividend markdowns occurred in ARADEL and MEYER. Wema Bank’s rights issue remains open.
The NGX All-Share Index is up 5.64% year-to-date.
Fixed Income Market
The Treasury Bills market opened the week on a bearish note, weighed down by weak demand ahead of the Open Market Operations (OMO) and Nigerian Treasury Bills (NTB) auctions.
At the OMO auction, mild rate declines were recorded amid total subscriptions of ₦773.74 billion. The NTB auction, however, attracted robust demand, with total usbscriptions reaching ₦1.08 trillion. Stop rates on the 91-day and 182-day bills remained at 18.00% and 18.50%, respectively, while the 364-day rate rose slightly to 19.63%. Post-auction market activities improved modestly, particularly in newly issued 1-year and short-dated OMO papers.
Overall, the average NTB mid-rate rose 7 basis points week-on-week to 19.64%.
The Eurobond market traded mixed this week, shaped by global macroeconomic developments. The U.S. Federal Reserve’s decision to keep rates unchanged and its acknowledgement of stagflation risks dampened expectations of near-term rate cuts, driving investor interests toward high-yield emerging market debt.
Another factor was the improved risk sentiment—driven by easing U.S.-China trade tensions—which bolstered demand toward the end of the week.
Overall, Nigeria’s Eurobonds saw yields compress 18 basis points week-on-week to 10.24%.
The FGN local bond market remained quiet throughout the week, characterized by low volumes and weak investors’ participation. Bearish sentiment persisted, particularly on mid-tenor bonds like February 2031 and January 2035 maturities, while attention on the NTB auction further slowed activities, drawing attention away from the secondary market.
There was mild interest in long-dated papers, with trading activities later shifting to the April 2029 and July 2034 bonds. Overall, the average mid-yield rose by 3 basis points week-on-week to 18.72%.
Foreign Exchange
The Naira weakened by 46.5 basis points week-on-week to close at ₦1,609.64 to a U.S. dollar.
What To do
We expect the sell-off in risky assets to continue as uncertainty persists. However, we believe diversification, across currency and asset classes, remains the best risk optimization strategy. On this note, we encourage investors to be well positioned by building their cash holdings to take advantage of the attractive opportunities we expect during this time.
The AXA Mansard Money Market Fund & AXA Mansard Dollar Bond fund will help you earn income on your cash holdings whilst providing liquidity to take advantage of the anticipated increase in interest rates – NGN and USD.
