Global Market Updates:
Trade Tensions Resurface
Global markets were rattled as U.S. President threatened to impose 25% tariff on Apple products and 50% tariffs on European Union goods.
This latest move has reignited concerns over trade tensions, further straining the already fragile global trade relationships. The persistent uncertainties surrounding U.S. trade policy continues to cast a shadow over investors’ sentiment and global economic outlooks.
US Bond Yields Spike
The U.S.-30 Year Treasury yield rose above 5.00%, which is its highest since 2023 following the U.S. House of Representatives approval of a new budget bill. The bill forecasts that the U.S. government’s fiscal deficit will increase. This prompted a sell-off in the bond markets with other treasury yields rising.
U.S. Stock Market Pulls Back
U.S. equities lost momentum from the previous week as all the major U.S. indexes (S&P500, Dow Jones Industrial Average and Nasdaq Composite) ended the week in negative.
At Friday’s close of market, the S&P 500, the Dow Jones Industrial Average and the NASDAQ Composite closed -2.6%, -2.4% and -2.5% respectively.
Domestic Market Updates
The Nigerian Stock Market Reverses Course Amid Broad Sell-Offs
The Nigeria stock market reversed last week’s bullish trend, closing the week 0.62% lower, week-on-week, with the NGX All-Share Index settling at 109,028.62 points. Barring a modest gain on Tuesday, the All-Share Index declined in all other sessions, reflecting a cautious and bearish investor tone.
Buying interest in NESTLE (+19.50%) and PRESCO (+7.95%) were unable to offset pronounced sell pressure in names like TRANSCOHOT(-15.03%), MTNN (-2.88%) and FIDELITYBANK (-10.34%).
Fixed Income Market: Cautious Trading Amid Primary Auction Focus
Activities in the Treasury Bills market was largely muted during the week as investors’ attention shifted to the Nigerian Treasury Bills (NTB) primary market auction. While NTB activity was mostly muted, there was selective demand for long-dated Open Market Operations (OMO) maturities. The CBN offered ₦500 billion at the OMO auction, and the NTB auction saw strong demand, with ₦615.80 billion allotted and a slight dip in the 364-day stop rate to 19.56%. Post-auction, brief secondary market activity emerged, but execution was limited by wide bid/ask spreads.
The Eurobond market witnessed mixed sentiment during the week, initially pressured by Moody’s U.S. credit downgrade and heightened Middle East geopolitical risks, including tensions around Iran. Early losses were offset by bargain hunting, especially in Nigerian issues. Dovish signals from the U.S. Fed midweek spurred cautious optimism, but gains were limited by weak U.S. data and rising Treasury yields. Despite broader market challenges, Nigerian Eurobonds outperformed, with average mid-yields down 1 basis point week-on-week to 9.73%.
The FGN local bond market remained quiet during the week, with subdued activity as investors awaited the upcoming ₦300 billion FGN bond auction. Trading was focused on mid-curve tenors like the February 2031, May 2033, and January 2035 papers, though volumes were light. Selective interest appeared in the March 2027 and June 2038 bonds, but a bearish tone limited overall participation. Despite the cautious sentiment, average benchmark mid-yields fell 9 basis points week-on-week to 18.75%.
Foreign Exchange
The FX market recorded a relatively stable and bullish performance through the week, with the naira appreciating 1.14% week-on-week to close at ₦1,580.44 to 1USD.
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