Wk 4 (March ’26) – Global Markets Overview

I.  UNITED STATES  |  MACRO UPDATE

Labour Market — February 2026

The US labour market showed a meaningful loss of momentum in February 2026, with the latest data pointing to a broader and more pronounced softening than markets had anticipated. This weakness is likely to deepen concerns about the resilience of the current economic expansion.

Non-farm payrolls contracted by 92,000 in February, the sharpest monthly decline in four months reversing a 126,000 gain in January and missing the market consensus of a 59,000 addition by a considerable margin.

The unemployment rate rose to 4.4% from 4.3% in January, creeping closer to the four-year high of 4.5% recorded in November 2025. The number of unemployed persons increased by 203,000 to 7.57 million.

These prints confirm that the US labour market is losing momentum at a pace more pronounced than the Federal Reserve’s base case, raising the probability of an accelerated easing cycle.

Outlook

Risk appetite is likely to remain subdued in the near term, as Middle East tensions and disruptions to critical energy corridors reinforce upside risks to oil and inflation. That said, we expect the Fed’s policy stance to become increasingly data-dependent, as the combination of sticky inflation risks and softening labour market conditions presents a more delicate trade-off for policymakers. On balance, we still see the Fed leaning toward a measured easing cycle through 2026, with policy rates likely to settle within the 2.5%–3.5% range by year-end

II.  NIGERIA  |  DOMESTIC MACRO HIGHLIGHTS

Oil Sector — Production Decline (February 2026)

Nigeria’s upstream oil sector contracted for the second consecutive month in February 2026, reflecting persistent structural and operational constraints. Production fell to ~1.48 mbpd, down 8.8% month-on-month and 11.2% year-on-year, the lowest since June 2024, primarily due to turnaround maintenance at the Bonga field (Nigeria’s largest single-train offshore facility).

Across January and February, output has missed the 2026 target by 16.6 million barrels, well below the government’s 1.84 mbpd benchmark. While crude prices remain elevated at $110–$120/bbl amid Middle East supply risks, Nigeria’s production shortfall limits the fiscal gains from the high-price environment.

Outlook

We expect a modest production recovery through Q2 2026 as Bonga returns to full operating capacity following the completion of scheduled maintenance. NNPC’s stated target of 1.8mbpd for 2026 remains ambitious but is not implausible if upstream execution improves and Niger Delta security conditions remain stable. However, fiscal revenue projections tied to the 2026 budget remains at risk of underperformance if production recovery above current levels do not crystalize.

III.  NIGERIA CAPITAL MARKETS  |  FIXED INCOME

FGN Secondary Market — Week in Review

The FGN bond market ended the week slightly weaker, with average benchmark yields edging up 1bp to 15.78%. Trading was concentrated at the short to belly of the curve, where offers continued to outpace bids, reflecting cautious positioning ahead of Monday’s primary auction.

Primary Market — March DMO Auction

The Debt Management Office (DMO) is scheduled to conduct its March 2026 bond auction today, Monday 30 March, targeting ₦750 billion through the re-opening of three existing instruments:

The March offer reflects a ₦50 billion reduction from the ₦800 billion raised in February 2026, signalling a more calibrated approach to domestic borrowing as the DMO seek to moderate the pace of yield escalation.

Outlook — FGN Bond Market

We remain cautiously constructive on FGN bonds as the CBN gradually shifts toward a more neutral policy stance. Robust system liquidity of c. ₦5.93 trillion should support demand at upcoming auctions, particularly at the belly of the curve. Yields at lower 16% levels should continue to attract flows from pensions and insurers, though the high-coupon environment is expected to keep debt servicing costs elevated, leaving the market sensitive to any fiscal slippage.

IV.  NIGERIA  |  TREASURY BILLS

NTB Secondary & Primary Market — Week in Review

The Nigerian Treasury Bill (NTB) secondary market closed the week on a bullish note, with average benchmark yields declining 10bps to 17.60%. The move was underpinned by unmet demand from the week’s primary auction filtering back into the secondary market, compressing yields along the curve.

The CBN conducted an NTB primary auction on Wednesday, offering ₦400 billion but allotting ₦520.67 billion, highlighting the market’s deep liquidity. Total subscriptions reached ₦3.1 trillion roughly eight times the initial offer, underscoring strong investor appetite.

Stop rates moderated across the curve, with the 182-day and 364-day bills easing 20 bps to 16.42% and 16.43%, respectively, while the 91-day bill held steady at 15.95%.

Investor demand was heavily concentrated in the 364-day instrument, which received ₦2.73 trillion in bids against a ₦200 billion offer indicating a clear positioning for further yield compression and a willingness to extend duration ahead of anticipated CBN easing.

V.  NIGERIA  |  SOVEREIGN EUROBOND MARKET

Week in Review

The Nigerian sovereign Eurobond market recorded a bearish week, with broad-based offers across the curve reflecting a deterioration in risk appetite driven principally by heightened geopolitical tensions in the Middle East. The escalation of hostilities in the region triggered a flight-to-safety dynamics in global markets, with emerging market sovereign credits including Nigerian paper coming under selling pressure across all tenors. There were no pockets of meaningful demand to offset the negative tone, and the curve widened in sympathy with the broader sell-off in SSA Eurobonds.

Outlook — Eurobond Market

Despite the near-term headwinds from Middle East risk aversion, our medium-term outlook for Nigerian Eurobonds remains constructive. The structural tailwinds, anticipated Fed easing toward 2.5%–3.5%, improving Nigerian fiscal indicators, and growing institutional appetite for high-yielding EM credit remain firmly in place. Key risks to our constructive stance include a persistent escalation in the Middle East disrupting global risk appetite, and any domestic policy missteps that undermine Nigeria’s reform credibility.

VI.  NIGERIA  |  EQUITIES — NGX

Week in Review

The Nigerian equities market closed the week on a mildly negative note, with the NGX All-Share Index (ASI) declining 0.12% w/w to 200,913.06 points, while market capitalisation eased by a similar margin to ₦128.97 trillion. The subdued performance reflects a measured bout of profit-taking, particularly in recently outperformed names, as investors repositioned ahead of quarter-end.

Sectoral performance was mixed, underscoring the market’s increasingly selective tone. The Insurance index led sectoral gainers, rising 2.90%, followed by Oil & Gas, which advanced 1.93% amid support from firmer crude oil prices and renewed interest in energy names. On the downside, the Consumer Goods index declined 2.62%, pressured by persistent margin concerns and profit-taking in key bellwethers. Industrial Goods also closed lower, while the Banking space saw selective selloffs as investors locked in gains following the sector’s strong recent run.

Outlook — NGX Equities

Looking ahead, we expect cautious trading to persist in the near term as portfolio rebalancing continues into the close of Q1 2026. While elevated yields may cap broad-based upside, we continue to see selective value emerging in the financials and Oil & Gas sector. In contrast, we remain more guarded on consumer-facing counters, where margin pressure and weak real income dynamics could continue to weigh on performance. Dividend declarations and Q1 earnings releases should provide the next meaningful catalysts for market direction.