Global Markets:

United States

In the United States (US), inflation rate dropped to 2.7% in November 2025, the lowest since July 2025. No report for October 2025 because of the shutdown. Weekly jobless claims declined by 13,000 to 224,000 for the week ended Dec-13, suggesting fewer new layoffs. However, claims remain higher than anticipated. The unemployment rate has climbed to 4.6% the highest level since October 2025.

Euro Area

The European Central Bank (ECB) maintained its key policy rate at 2% for the fourth consecutive meeting, signalling confidence that current economic conditions do not require policy adjustment. Supporting this stance, updated staff projections indicate that Euro Area inflation is expected to stabilise close to the 2% target over the medium term, while economic growth between 2025 and 2028 is projected to remain modest and largely driven by domestic demand. Financial markets had largely priced in this outcome, with European equities edging modestly lower ahead of the decision as investors adjusted positions in anticipation of prolonged rate stability.Asia

The Bank of Japan raised its short-term interest rate to 0.75%, the highest in 30 years, responding to sustained inflation and improving business confidence. China launched a US$113 billion free-trade initiative in Hainan Island to attract foreign investment, boost trade, and diversify the economy. Asian markets advanced moderately, supported by the BOJ hike and stronger Wall Street performance, despite a weaker Yen and mixed external signals.

Oil Markets

Oil prices fell this week mainly due to expectations of abundant global supply and easing geopolitical risk premiums, particularly optimism about a potential Russia‑Ukraine peace deal that reduced concerns over supply disruptions.

Outlook:

Global markets are expected to trade cautiously this week as investors digest signals from major regions. In the United States (US), easing inflation and slightly higher unemployment may influence further rate cut early next year. Euro Area markets may remain steady as the European central Bank (ECB) signals confidence in stable growth and inflation near target. In Asia, the BOJ’s historic rate hike and China’s large free-trade initiative may support risk appetite, though a weaker Yen and uneven external data could limit gains. Oil prices may stay under pressure amid abundant supply and easing geopolitical concerns. Overall, markets are likely to balance moderating inflation with persistent uncertainties in growth, energy demand, and monetary policy. 

Domestic Economy:

Nigeria’s Inflation Eases

Nigeria’s inflation trajectory showed continued moderation, with the headline rate easing to 14.45% in November 2025 year-on-year from 16.05% in October 2025. Food inflation also slowed, marking the eighth consecutive monthly decline in overall price pressures. This trend reflects gradually easing demand-side pressures and some stabilisation in essential goods prices, offering modest relief to households and signaling potential room for more balanced monetary conditions. To stimulate economic growth, President Tinubu, on Friday presented the 2026 Budget proposal to the National Assembly follows: Projected Total expenditure ₦58.18 trn, projected revenue ₦34.33 trn, budget deficit ₦23.85 trn which is 4.28% of the Gross Domestic Product (GDP), Capital expenditure ₦26.08 trn, Recurrent (non-debt) expenditure ₦15,25 trn. Please watch out for our detailed analysis of the budget proposal.

Equity Market:

The Nigerian Exchange All Share Index (NGX-ASI) rose by 1.76% week on week (W/W), closing at 152,057.38 points. Market capitalisation stood at ₦96.94tn and year to date return stood at 47.73%. 

Fixed Income and Money Market:

The fixed-income market traded mixed during last week as investors balanced improved system liquidity with cautious positioning. Long-tenor Nigerian Treasury Bills yields’ declined on renewed demand, while the mid to short- tenor Nigerian Treasury Bills yields’ rose. The bond market was bullish, with yields falling across the 3-year to 10-year curve. Open Repo Rate (OPR) and Overnight Rate (OVR) settled at 22.50% and 22.75% respectively. Open Market Operations (OMO) yield closed at 19.69% for the 201-day paper. 

Outlook:

Equity Market

The Nigerian equity market is likely to remain broadly positive in the coming week, supported by easing inflation, improving macroeconomic sentiment, and continued investor appetite for fundamentally strong stocks. Gains may be driven by consumer goods, building materials, banking, and insurance stocks, as investors position for earnings resilience and inflation relief. However, intermittent profit-taking is expected after the strong year-to-date performance, which could moderate upside momentum.

Fixed Income Market

The Fixed income market is expected to trade mixed, with sustained demand for longer-dated bonds as investors lock in attractive real yields amid moderating inflation. Treasury bill yields may remain uneven across tenors, reflecting liquidity conditions and cautious positioning ahead of primary market auctions. Overall, bond yields are likely to stay biased downward, while money market rates should remain stable around current levels in the absence of major liquidity shocks.