March 16, 2026/United Capital Update

Global Markets

United States

In the United States, annual inflation held steady at 2.4% in February 2026, unchanged from January and remaining at its lowest level since May 2025. Energy prices rebounded slightly, driven by higher fuel oil and natural gas costs and a smaller decline in gasoline prices, while inflation for food and shelter remained stable. Meanwhile, core inflation, which excludes food and energy, remained unchanged at 2.5%. In the short term, inflation rate is expected to spike because of rising energy prices due to the war in Iran. This may lead to a tightening monetary policy if inflation returns.

Euro Area

In the Euro Area, Christine Lagarde, President of the European Central Bank (ECB), stated that the Central Bank will take necessary measures to keep inflation under control despite the recent surge in energy prices. She noted that Europe is now better positioned to absorb energy shocks than during the 2022 European energy crisis, although uncertainty and market volatility remain elevated.

Asia

China’s annual inflation rose to 1.3% in February 2026, up from 0.2% in January and the highest since January 2023. This is driven largely by seasonal demand during the Lunar New Year, which lifted food prices alongside stronger non-food inflation in sectors such as healthcare, clothing, and education. Core inflation also increased to 1.8%, its strongest level since 2019. This rebound suggests rising price pressures and may help ease concerns about deflation in the Chinese economy if sustained. Energy induced prices will lead to higher inflation from March 2026.

Oil Markets

Oil prices surged last week driven primarily by a rapidly escalating US-Iran military conflict that has effectively shut down the Strait of Hormuz, a critical point through which approximately 20% of the world’s daily oil supply passes. Iran’s new supreme leader vowed to continue attacks, keeping supply disruption fears firmly in the market. The International Energy Agency (IEA) responded with its largest ever emergency reserve release of 400 million barrels, though the sheer scale of the intervention ironically reinforced trader concerns about the severity of the supply shock, keeping prices elevated.

Outlook

This week, global equity markets are expected to trade cautiously and remain volatile as the escalating US–Iran conflict continues to dominate sentiment. Energy-importing regions, particularly Europe and parts of Asia, face stronger headwinds as rising oil prices squeeze corporate margins and fuel inflation concerns. US markets may prove relatively resilient due to domestic energy production, though investors will watch for any interest rate decisions of major Central Banks. In Asia, the Bank of Japan will continue to monitor potential spillovers from the conflict. Oil prices are likely to remain elevated and sensitive to developments around the Strait of Hormuz, where any escalation could push Brent further above $100 per barrel. The IEA’s emergency reserve release may offer a short-term buffer, but markets will watch closely whether it is sufficient to contain the supply shock.

Domestic Economy

Nigeria recorded a trade surplus of US$3.37 billion in Q4 2025, with exports totaling US$14.77 billion against imports of US$11.40 billion. The country maintained a surplus throughout 2025 despite fluctuations in import levels, which ranged between US$3.0 billion and US$4.5 billion during the year. Meanwhile, the composite Purchasing Managers’ Index (PMI) remained firmly in expansion at 56.4 points in February 2026, indicating strong economic activity in the private sector. The sustained trade surplus alongside robust business activity points to improving external and domestic economic conditions, which could support economic growth if the momentum is maintained. These will have positive impact on equity and fixed income securities.

Equity Market

The Nigerian Exchange All Share Index (NGX-ASI) rose by 0.73% week on week (W/W), closing at 198,407.30 points. Market capitalisation stood at ₦127.36tn and year to date return stood at 27.50%. The Industrial Goods sector recorded the best gain during the week while the Insurance sector recorded the least performance.

Fixed Income and Money Market

The fixed income market recorded mostly bearish movements during the week. In the Nigerian Treasury bills (NTBs) segment, yields rose across board, with the 91-day, 182-day and 364-day tenors rising to 16.54%, 17.72% and 19.51% respectively. This indicates that despite CBN’s recent 0.50% rate cut to 26.5%, investors remain cautious and continue to demand elevated yields amid lingering inflation risks, tight liquidity, and uncertainty over the pace of future rate cuts because of the war in Iran. The Overnight rate improved marginally to 22.30%. In the bond market, yields moderated only on the medium term, with the 5-year yield falling to 16.21%, while the 3-year, 7-year and 10-year yields rose. While the drop in the 5-year yield reflects some optimism after the rate cut, rising short- and long-term yields point to continued investors’ concerns.

Outlook:

Equity Market

This week, the Nigerian equity market is likely to sustain its bullish momentum, though the pace of gains may moderate as the market approaches the significant 200,000-point threshold on the ASI. The Oil and gas sector may attract attention given elevated global oil prices. Overall, the market’s structural bull run remains intact, supported by the CBN’s rate cut and improving macro visibility, but investors should remain alert to global risk-off sentiment and potential profit-taking as valuations stretch.

Fixed Income Market

The impact of the ongoing war in Iran on crude oil may continue to exert inflationary pressures. This may lead to increase in yields on fixed income securities in the short-term.