Global Markets:

United States

In the United States (US), the economy expanded at a strong 2.3% year-on-year in Q3 2025, driven by solid consumer spending and exports. This strength pushed the S&P 500 to a record high. However, pressure remains in parts of the consumer sector, as more than 4,100 retail and restaurant businesses closed this year, showing that economic conditions are still uneven.

Euro Area

In the Euro Area, composite PMI fell to 51.9 points in December from 52.8 points in November, showing softer expansion and continued weakness in manufacturing. Despite this, the region’s external position improved, with an €18.4 billion trade surplus in October, helping offset slower domestic demand.Asia

Japan is balancing economic growth while keeping rising debt under control. The government plans to issue more bonds to fund a larger budget, while the central bank raised interest rates to 0.75%. The equity market ended the week slightly higher, supported by positive global sentiment and strong performance in technology stocks.

Oil Markets

Oil prices rose during the week primarily due to increased concerns about potential supply disruptions from a US blockade of Venezuelan oil tankers and geopolitical risks.

Outlook:

Global markets are likely to start this week cautiously optimistic as strong US growth contrasts with weak consumer sectors, while Euro Area manufacturing slows despite a healthy trade surplus. In Asia, Japan’s tighter policy and increased bond issuance will draw attention, with tech stocks supporting markets. Oil and commodities may remain volatile due to geopolitical risks and potential supply disruptions. Investors are expected to focus on selective opportunities amid mixed economic signals. 

Domestic Economy:

Nigeria 2026 Budget Outlook

Nigeria’s 2026 budget targets ₦58.18tn expenditure, ₦34.33tn revenue, leaving a ₦23.85tn deficit. The deficit will be financed mainly through domestic borrowing and selective external loans. Key priorities include security (₦5.41tn), infrastructure (₦3.56tn), education (₦3.52tn) and health (₦2.48tn). The 2026 budget is guided by four clear objectives which are: consolidate macroeconomic stability; improve the business and investment environment; promote job‑rich growth and reduce poverty; and strengthen human capital development while protecting the vulnerable. Watch for the details in our upcoming note on the proposed budget.

Equity Market:

The Nigerian Exchange All Share Index (NGX-ASI) rose by 0.97% week on week (W/W), closing at 153,534.52 points. Market capitalisation stood at ₦97.89tn and year to date return stood at 49.17%. 

Fixed Income and Money Market:

The fixed-income market traded mixed this week as investors balanced improved system liquidity with cautious positioning. Yields across the Short- to long-tenor Nigerian Treasury Bills (NTB) yields’ rose on weaker investor demand. The bond market was mixed, with yields on the 3-year and 5-year curve declining while the 7-year and 10 year yield had marginal gains. Open Repo Rate (OPR) and Overnight Rate (OVR) settled at 22.50% and 22.68% respectively. Open Market Operations (OMO) yield closed at 19.63% for the 196-day paper. 

Outlook:

Equity Market

The Nigerian equity market is likely to trade cautiously positive this week, supported by steady GDP growth, strong external reserves, and broad-based sector gains. Investors will focus on fundamentally strong stocks in consumer goods, banking, and industrials, while profit-taking may limit sharp rallies.

Fixed Income Market

The fixed-income market may see moderate activity, with stable liquidity and steady interbank rates supporting demand for Treasury bills and Government bonds. Yields may adjust slightly across the 3- to 10-year curve as investors monitor domestic borrowing and fiscal developments.