Global Markets

United States

In the United States (US), the Federal Open Market Committee of the US Federal Reserve (Fed) decided to hold rates at 3.5%–3.75%, reflecting caution amid higher oil prices, sticky inflation, and a softer labour market. The Fed’s decision to hold rates reflects a Central Bank caught between expected elevated inflation, amplified by the oil shock from the Strait of Hormuz crisis, and a weak growth outlook. Meanwhile, industrial production dropped to 1.40% in February 2026 year-on-year, from 2.23% in January 2026. This indicates softer momentum.

Euro Area
In the Euro Area, on an annual basis, industrial production fell to 1.2%. This marks the first yearly decline in 2026 and falls short of analysts’ expectations of 1.4% growth. Industrial production also fell 1.5% month-on-month in January 2026, following a revised 0.6% decline in December 2025. It was the sharpest monthly drop since April 2025, driven by declines across key sectors. This suggests weakening industrial momentum in the Euro Area, which could dampen global demand and weigh on export-driven economies.

Asia

China’s surveyed urban unemployment rate rose to 5.3% in February 2026 from 5.2% in the previous month and above market expectations of 5.1%. However, retail sales grew by 2.8% year-on-year in the first two months of 2026. This is an acceleration from December, and it exceeded forecasts, reflecting improved consumer activity. This marks the strongest growth since last October, partly boosted by the Lunar New Year holiday in mid-February. Nevertheless, the divergence between rising unemployment and stronger consumption suggests uneven recovery momentum in China. Amid global uncertainties and elevated oil prices, this mixed trend could moderate global demand outlook.

Oil Markets

Oil prices continued to surge last week, with Brent briefly reaching $106 and trading between $100–$104. This was driven by fears of closure of the Strait of Hormuz and damage to oil production facilities. Gulf countries cut production by at least 10 million barrels daily, marking the largest global supply disruption in history. Calls for a multinational coalition to reopen the Strait received limited support, keeping prices elevated. The International Energy Agency (IEA) has suggested further emergency reserve releases, highlighting the severity of the supply shock.

Outlook

This week, global equity markets are expected to remain cautious and volatile. The Fed’s decision to hold rates at 3.5%–3.75% reinforces an expectation of increase in inflation in the short-term on account of increases in oil prices. This will limit the upside for rate-sensitive equities and shift focus to further Fed guidance, especially ahead of Powell’s term expiring in May 2026. European markets face pressure from elevated energy costs due to the Strait of Hormuz disruption, squeezing margins. In Asia, markets will track China’s policy signals as its 4.5–5% growth target faces downside risks from rising energy costs and weaker global trade. The prolonged Strait disruption continues to give oil prices room to surge and drive supply chain inflation globally. This will further complicate Central Banks’ decisions. A diplomatic resolution to the Iran conflict remains the key potential trigger for a broad market rebound.

Domestic Economy

Nigeria’s headline inflation eased slightly to 15.06% in February 2026 from 15.10% in January, indicating a fragile but ongoing disinflation trend. Food inflation, the largest component, rose to 12.12%, reflecting supply-side pressures from logistics and seasonal factors. Core inflation fell by 1.84%, driven by lower energy and non-food prices. The divergence between easing core inflation and rising food prices presents a policy challenge for the Central Bank of Nigeria (CBN), as overly aggressive rate cuts could entrench food inflation, while slow easing may delay economic relief. In the short term, rising oil prices will put upward pressure on inflation which may affect interest rate and yields on fixed income securities.

Equity Market

The Nigerian Exchange All Share Index (NGX-ASI) rose by 1.39% week on week (W/W), surpassing the 200,000 points mark, and closing at 201,156.85 points, with year to date at 29.17%. Market capitalisation stood at ₦129.13tn. The Industrial Goods sector recorded the best gain during the week while the Oil and Gas sector recorded the least performance.

Fixed Income and Money Market

The fixed income market recorded mixed sentiments during the week. In the Nigerian Treasury bills (NTBs) segment, yields rose on the medium to long-term ends of the curve, with the 182-day and 364-day tenor yields rising to 18.11% and 19.64% respectively. Only the 91-day tenor yield fell to 16.01%. This indicates that investors remain cautious and continue to demand high yields. This comes amid lingering inflation risks, tight liquidity, and uncertainty over the interest rate cuts due to the US-Iran war. The Overnight rate fell marginally to 22.26%. In the bond market, yields mostly moderated, with the 3-year, 5-year and 10-year yields falling to 16.03%, 16.06% and 15.71% respectively. On the flip side, only the 7-year bond yield stayed flat. This reflects selective buying interest, although overall sentiment remains cautious given the interplay between easing domestic policy and persistent external risks.

Outlook:

Equity Market

The Nigerian equity market may sustain its bullish momentum this week, having broken and held above the historic 200,000-point threshold. This milestone has reinforced investor confidence and attracted renewed institutional interest. The market is undergoing a broader re-rating, with global investors reassessing the country’s economic progress and strong outlook. This comes after strong returns, ongoing reforms, and the improving macroeconomic direction. Banking and industrial goods stocks are likely to remain the primary drivers of activity. However, profit-taking in high-performing stocks may introduce mild volatility as investors rebalance ahead of the quarter-end. Overall, the structural bull run remains intact. This run is supported by strong corporate fundamentals and growing local and foreign participation. However, investors should remain alert to global risk-off spillovers.

Fixed Income Market

The Nigerian fixed income market is likely to remain under mild bearish pressure this week. Rising global oil prices continue to threaten domestic inflationary conditions and dampen expectations of aggressive CBN rate cuts in the near term. However, the expected stability in the foreign exchange market and the drop in fiscal deficit may have moderating impact on yields.