Global Market Updates:
U.S. Inflation Rises
U.S. consumer prices rose modestly in July, with higher goods costs linked to import tariffs pushing underlying inflation to its fastest monthly pace in six months. The Consumer Price Index (CPI) increased by +0.2% from June, in line with forecasts, after a +0.3% rise the prior month.
On an annual basis, CPI remained unchanged at 2.7%, slightly below the 2.8% expected. Without food and energy, core CPI increased by +0.3% – the strongest increase since January – lifting the year-on-year rate to 3.1% from 2.9% prior year.
U.S. Equities Inches Higher
Equity markets extended their gains, marking a second consecutive week of positive performance, driven by impressive performance from the S&P 500 and NASDAQ. S&P 500, Dow Jones and NASDAQ returned +1.0%, + 1.8% and +0.8%, respectively. Improved corporate earnings and resilient consumer spending helped offset inflation concerns.
Nigerian Market Updates
Inflation Eases for the Fourth Consecutive Month
Nigeria’s headline inflation eased to 21.88% year-on-year in July from 22.22% in June, continuing its downward trend. On a monthly basis, CPI rose by +1.99%, up from +1.68% in June, underscoring persistent short-term price pressures despite the annual moderation.
On a month-on-month basis, core inflation grew by 0.97% down sharply from 2.46% in June, bringing the year-on-year figure to 21.33%. The gradual decline in inflation reflects the rebasing of the CPI earlier in the year, which introduced a new base year and updated the basket of goods, triggering an initial sharp drop before stabilising into a steady downtrend.
The Central Bank’s Monetary Policy Committee (MPC) maintained the policy rate at 27.5% in July, with a potential rate cut on the table in September if inflation continues to ease.
The Nigerian Stock Market: First Decline After 11 Weeks
The Nigerian Stock Exchange ended the week lower, breaking an 11-week winning streak as the All-Share Index (ASI) fell -0.77% week-on-week to 144,628.20 points, pressured by profit-taking in medium- and large-cap names. Sector performance was broadly negative, led by Oil & Gas index (-1.42%), dragged by declines in ARADEL and OANDO, followed by Consumer Goods (-0.94%), Industrial Goods (-0.83%), and Banking (-0.23%), while Insurance emerged as the sole gainer with a strong +8.21% advance despite late-week sell-offs.
Fixed Income and Foreign Exchange (FX)
The Nigerian Treasury Bills (NTB) market began the week on a firm footing, supported by ample system liquidity which gave way to mid-week sell-offs as liquidity tightened.
The average yield was broadly flat at 17.96%, with strong demand for the 2025 and 2026 maturities driving yields lower, while some longer-dated bills such as the 20 Nov 2025, 26 Mar 2026, and 09 Jul 2026 saw upward pressure, with yields rising by 16bps to 17.41%, 37bps to 18.92%, and 41bps to 18.95%, respectively.
The African Eurobond market delivered a mixed performance over the week as investors considered series of global developments. The market opened higher, buoyed by last week’s 25bps rate cut by the Bank of England and expectations of a September Fed cut which supported gains across African Eurobonds.
However, sentiment turned mid-week after U.S. July CPI held steady at 2.7% and stronger-than-expected Producer Price Index (PPI) data pushed U.S. Treasury yields higher, triggering a broad sell-off in global government bonds and tempering rate-cut expectations.
Despite the late-week pressure, most major African Eurobonds were relatively resilient, with Nigerian Eurobonds recording a 20bps drop in average mid-yield to settle at 7.84%.
Meanwhile, the Federal Government of Nigeria (local) bonds market ended the week on a mixed note as investors maintained a cautious stance. Early trading favoured short and mid-dated maturities, while longer tenors came under pressure, with the FGN 2037 and FGN 2038 yields climbing 52bps to 16.09% and 19bps to 15.87%, respectively.
This was partly offset by strength in the 14.55% FGN 2029, which saw its yield fall 35bps to 16.42%. Mid-week sentiment weakened after the Debt Management Office (DMO) announced a larger-than-expected auction size and introduced a new 5-year Nigerian Government Bond – NIGB AUG 2030 – lifting yields across the mid-curve.
Despite some late-week buying interest following the release of inflation figure, benchmark bond yields still closed 11bps higher at 16.20% week-on-week.
Foreign Exchange
On the currency front, the naira strengthened slightly, appreciating by 0.32% week-on-week to close the week at N1,530.00 to $1.
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