Global Market Updates:
U.S. Fed Keeps Rates Steady
As expected, the U.S. Federal Reserve kept its target interest rate unchanged at 4.25%-4.50% during the latest meeting of the policy-steering Federal Open Market Committee (FOMC), as widely expected, since it was cut by 1 percentage point between September and December 2024. While the central bank lowered its economic growth forecast, it revised its inflation outlook upward, reflecting ongoing price pressures.
On the path of interest rates, despite recent uncertainty, the Fed maintained its guidance for 50 basis points (bps) in rate cuts for 2025.
U.S. Market Close Negative
U.S. stock indexes ended the week under pressure amid renewed Middle East tensions, prompting a flight to safe-haven assets.
The S&P500, Dow Jones and NASDAQ closed -0.2%, +0.08%, and -0.2% respectively.
Nigeria Domestic Market Updates
Inflation continues to Ease
Nigeria’s headline inflation rate fell for the second consecutive month, down to 22.97% in May 2025 from 23.71% in April. This marks a second month of decline and reflects broad-based moderation across components like core inflation which dropped to 22.28% (from 27.04%), food inflation slowed to 21.14% year-on-year, urban and rural inflation eased to 23.14% and 22.70% respectively and monthly consumer price index (CPI) growth decelerated to 1.53%.
The decline reflects macroeconomic stability, steady FX policy and a stronger naira, pointing to early gains from ongoing monetary reforms.
The Nigerian Stock Market: Bullish Momentum Continues
The Nigerian Stock Market sustained its bullish momentum, posting a fourth consecutive weekly gain, with the All-Share Index (ASI) rising 2.3% week-on-week to 118,138.2 points. This lifted year-to-date returns to 14.8%, up from 12.1% the previous week, while market capitalisation also advanced by 2.3%, rising to ₦74.5 trillion.
Market performance was broadly positive, with five sectors closing in the green. The Oil & Gas and Banking indices led gains, rising +5.3% and +3.6% respectively, driven by SEPLAT, ARADEL, GTCO, and STANBIC who were the key performers. The AFR-ICT, Insurance, and Consumer Goods indices also posted strong advances.
However, losses in REDSTARE and BUACEMENT dragged the Industrial Goods index down to 0.4%.
Fixed Income Market
The Treasury Bills market was quiet at the start of the week but turned active during the Nigerian Treasury Bill (NTB) auction. A slight bullish bias was observed midweek in select mid-to-long tenor OMO bills. However, trading activity declined by week’s end amid wide bid-ask spreads and subdued investor interest.
The auction saw strong demand and lower rates across all maturities. Overall, yields dipped, with the average NTB mid-yield declined 36bps to 18.91%.
The Eurobond market trading sentiment turned mixed-to-bearish amid rising geopolitical tensions in the Middle East and renewed U.S.-Iran conflict risks. The Fed’s downgraded growth outlook and persistent inflation concerns added pressure, despite expectations for two rate cuts in 2025.
Light flows from the Juneteenth holiday dampened activity, while Nigerian Eurobonds underperformed, with average yields up 8bps to 9.00%.
The FGN local bond market saw subdued trading activity with minimal movement across the yield curve. However, selective interest in mid-dated tenors—particularly the May 2033s—attracted interest ahead of Monday’s bond auction.
The session ended on a positive note, with average yields declining by 17bps to 18.26%.
Foreign Exchange
The Naira strengthened for the third consecutive week, closing at ₦1,553.12 to 1USD, up 2.08% week-on-week.
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