Please click to view/download the Weekly Report for the week ending Friday 13^th September 2024

Global Economy

• According to the latest report from the Bureau of Labor Statistics (BLS), annual inflation rate in the United States (US) slowed for the fifth consecutive month to 2.50% in August 2024, the lowest reading since February 2021, from 2.90% in July, and below forecasts of 2.60%. Meanwhile, the annual core inflation rate remained unchanged from July’s readings to the print at 3.20% in August, and aligning with market expectations. On a monthly basis, The consumer price index in the US rose by 0.20% in August 2024, the same as in July, and in line with expectations. While core inflation rose by 10bps to 0.30% MoM.
  

• Elsewhere, the European Central Bank (ECB) held their monetary policy meeting on September 12, 2024. The decision reflected a strategic adjustment aimed at moderating restrictive monetary measures as the Governing Council decided to lower the deposit facility rate by 25 basis points, bringing it down to 3.50%. The changes are driven by updated projections showing that inflation is expected to average 2.50% in 2024, 2.20% in 2025, and 1.90% in 2026, while core inflation will decrease from 2.90% in 2024 to 2.0% by 2026.
  

Nigerian Economy

• Earlier in the week, Nigeria’s average daily crude oil production increased by 3.40% in August 2024, reaching 1.352 million barrels per day (MMbpd), according to OPEC’s latest report. This marks a rise of 45,000 barrels from July’s production level of 1.307 MMbpd. The report highlighted Nigeria’s fluctuating oil output throughout the year. Production dipped to 1.25 MMbpd in May, down by 30,000 barrels from April’s 1.28 MMbpd. This followed earlier drops from 1.32 MMbpd in February to 1.23 MMbpd in March. Despite these fluctuations, Nigerian crude, primarily light-sweet blends like Brass River, Bonny Light, and Qua Iboe, remains favored in global markets due to its low sulfur content.
  

• Elsewhere, Nigeria’s economic landscape is showing promising signs of growth and resilience, evidenced by the latest trade figures for the second quarter of 2024. The country recorded an impressive trade surplus of NGN6.95 trillion, marking a 6.60% increase from the N6.52 trillion surplus in the first quarter. The total merchandise trade for Q2:2024 stood at NGN31.89 trillion, representing a slight 3.76% decline from the previous quarter. However, when compared to the same period in 2023, this figure showcases a remarkable 150.39% increase, underlining the significant strides made in Nigeria’s trade sector over the past year.

Equities Market 

• This week, the local equities market made a rebound from the losses printed in the previous week as gains were recorded in three out of five trading sessions in the week. As a result, the NGX-ASI advanced by 1.06% week-on-week to close at 97,456.62 points. In the same vein, market capitalization rose to NGN56.00 trillion from NGN55.39 trillion when compared to the previous week. Furthermore, Year-to-Date (YTD) return increased to 30.34% from 28.97% recorded in the prior week.

Money Market

• System liquidity experienced less pressure this week despite the funding of the settlement for the NTB auction held during the week. As a result, money market rates moved in different directions as Open Buy Back rate moderated by 5bps to 31.20% while Overnight rate inched up by 3bps to close at 31.73%.
  

• In the coming week, we expect interbank rates to moderate in the absence of any substantial funding pressure.
  

Bond Market

• This week, the bond secondary market traded on a mixed note, with yields closing in different directions as investors continued cherry-picking on bonds with attractive yields. As a result, the yield on the 5yr benchmark bond rose by 6bps to close at 19.59%, while the yield on the 10yr benchmark bond closed flat at 18.77%. Elsewhere, the yield on the 20yr benchmark bond declined by 24bps to close at 17.25%.
  

Foreign Exchange Market

• This week, FX reserves increased materially by 1.30% to close at USD36.87bn.
  

• However, the Naira depreciated by 3.42% against the USD to close at NGN1,649.76 at the official window.

  The Week Ahead

Nigeria

• The Inflation data for August will be released on September 16, 2024.
  

United States

• The Retail sales data for August will be released on September 17, 2024.

• The Building permits data for August will be released on September 18, 2024.
  

• The FOMC meeting will hold on September 18, 2024.
  

United Kingdom

• The Inflation data for August will be released on September 18, 2024.

• The MPC meeting of the BoE will hold on September 19, 2024.

• The Retail sales data for August will be released on September 20, 2024.
  

Canada

• The Inflation data for August will be released on September 17, 2024.
  

Japan

• The Balance of Trade data for August will be released on September 18, 2024.
  

• The Inflation data for August will be released on September 20, 2024.
  

• The MPC meeting of the BoJ will hold on September 20, 2024.