Please click to view/download the Weekly Report for the week ending Friday 16^th May 2025

Global Economy

• Moody s Ratings downgraded the United States long-term credit rating from Aaa to Aa1, eliminating the country’s last top-tier rating from the three agencies. This move brings Moody s in line with Fitch and S&P, which had earlier downgraded the U.S. in 2023 and 2011, respectively. The decision reflects growing concerns about the nation s fiscal sustainability, rising debt burden, and political gridlock over long-term fiscal reforms.

• Elsewhere, according to the Bureau of Economic Analysis (BEA), the annual headline inflation rate in the United State (U.S.) eased to 2.30% in April 2025 from 2.40% in March the lowest print since February 2021 and below forecasts of 2.40%. This marks the third consecutive month of disinflation, largely driven by a sharper 3.70% decline in energy prices, following a 3.30% drop in the previous month.

Nigerian Economy

• Last week, it was reported that in April 2025, the Federation Account Allocation Committee (FAAC) disbursed a total of NGN1.68trn to the three tiers of government Federal, State, and Local Governments. This marks a significant increase compared to NGN1.12trn shared in March 2025, reflecting a 49.65% month-on-month rise in distributable revenue. The spike was largely driven by improved oil receipts, exchange rate gains, and a marginal rise in Value Added Tax (VAT).

• Elsewhere, in April 2025, Nigeria’s average daily crude oil production rose to 1.486 million barrels per day (MMbpd), up from 1.401 MMbpd in March, reflecting a 6.1% MoM increase. This improvement marks the highest output recorded so far in 2025, indicating a positive trend in the country’s oil production activities. Including condensates, total daily oil output averaged 1.683 MMbpd in April, up from 1.603 MMbpd in March, representing a 5% MoM increase.

Equities Market

• Last week, the local equities market closed in the positive terrain for the fourth consecutive week, driven by gains in four out of the five trading sessions of the week. As a result, the NGX-ASI advanced by 0.90% week-on-week to settle at 109,710.37 points. Similarly, market capitalization rose to NGN68.95 trillion from NGN68.34 trillion seen in the preceding week. Furthermore, Year-to-Date (YTD) return increased to 6.59% from 5.64% observed in the previous week.

Money Market

• Money market rates were relatively flat week on week, as the Open Buy Back rate was unchanged at 26.50%, while the Overnight lending rate inched up by 1bp to close 26.96%. Liquidity contracted at the start of the week due to FX settlements. However, liquidity conditions improved later in the week amidst inflow from FGN coupon payment amounting to NGN175.60bn.

• This week, we expect system liquidity to remain somewhat optimal, driven by anticipated inflow from FAAC payments and OMO maturities, even as the CNB has a sum of NGN500.00bn worth of treasury bills on offer across three tenors. We expect stop rates to be mostly unchanged from the last auction.

Bond Market

• In the just concluded week, the bond market traded on a mixed note, however, with a mild positive bias as yields moderated on most maturities across the curve, with investors cherry-picking on bonds with attractive yields. As a result, the yield on the 5yr benchmark bond moderated by 1bp to 19.62%, while the yield on the 10yr benchmark bond inched up by 1bps to 19.06%. Elsewhere, the yield on the 20yr benchmark bond closed flat at 17.66%.

Foreign Exchange Market

• In the past week, FX reserves increased by 0.56% to close at USD38.34bn.

• Similarly, Naira appreciated by 0.46% against the USD to close at NGN1,598.72 at the official window.

 The Week Ahead

Nigeria

• The GDP growth rate data for Q1 will be released on May 23, 2025.

United States

• The Existing home sales data for April will be released on May 22, 2025.

United Kingdom

• The Inflation data for April will be released on May 21, 2025.

• The Retail sales data for April will be released on May 23, 2025.

Japan

• The Balance of Trade data for April will be released on May 21, 2025.

• The Inflation data for April will be released on May 23, 2025.

China

• The Industrial production data for April will be released on May 19, 2025.

• The Retail sales data for April will be released on May 19, 2025.

Canada

• The Inflation data for April will be released on May 20, 2025.