Global Markets:

United States

In the United States (US), the Federal Reserve retained the federal funds rate at 3.50 – 3.75% in January, pausing after three cuts in 2025 that eased borrowing costs. The US flash Composite Purchasing Managers Index (PMI) rose slightly to 52.8 points, signalling modest growth, though expansion remains slower than in the latter half of 2025.

Euro Area

In the Euro Area, economic activity expanded modestly in January, with the Composite PMI at 51.5 points. Services drove growth, while manufacturing rebounded back to expansion, signalling some industrial stabilisation despite restrained overall momentum.Asia

Across Asia, Japan’s unemployment held at 2.6% in December while inflation eased to 2.1%, supporting a cautious policy outlook. Asian equities, including the Nikkei and Kospi, saw consolidation amid mixed tech earnings and profit taking.

Oil Markets

Global oil prices surged this week, driven by supply concerns and rising demand, with Bonny Light up 7.6% to $73.92/bbl, signalling strong market sentiment despite lingering oversupply risks. This is expected to place upward pressure on the pump price of Premium Motor Spirit (PMS) in Nigeria. However, the appreciation in the exchange rate should moderate the impact of the price surge.

Outlook:

This week, Global markets are set for a cautious start as investors weigh mixed signals. US jobs and strong Q3 2025 GDP support confidence, while Eurozone growth is slow but steady. In Asia, Japan’s factories expanded and China set a cautious 2026 Gross Domestic Product (GDP) target. Oil and commodities remain sensitive to supply risks, and positive global economic growth keeping investors selective amid uncertainty. 

Domestic Economy:

Broad money (M3) rose to ₦124.4trillion in December 2025, driven by a 4% increase in narrow money to ₦42.1trillion, while quasi money edged lower, as stronger transactional balances and expanding domestic assets underpinned overall liquidity growth.

Equity Market:

The Nigerian Exchange All Share Index (NGX-ASI) fell by 0.09% week on week (W/W), closing at 165,370.40 points. Market capitalisation stood at ₦106.15tn and year to date return stood at 6.27%. Insurance sector recorded the best gain during the week while banking sector recorded the worst performance.

Fixed Income and Money Market:

The fixed-income market traded mixed this week as yields across the Short- to Longer-tenor Nigerian Treasury Bills yields’ rose on weak investor demand. The bond market was largely bullish, with yields on the 3-year, 5-year and 7-year falling while the 10-year curve yield had marginal gains. Open Repo Rate (OPR) and Overnight Rate (OVR) settled at 26.07% and 26.36% respectively. Open Market Operations (OMO) yield closed at 21.0% for the 235-day paper.

Outlook:

Equity Market

Nigerian equities are likely to trade sideways with sector rotation, as liquidity remains supportive but investors stay selective, favouring oil & gas and insurance stocks amid profit taking in banking sector stocks.

Fixed Income Market

Fixed income sentiment remains mixed, with elevated money market rates sustaining demand for longer-dated bills and bonds, while short-tenor yields stay pressured by liquidity management and cautious investor positioning.