The domestic stock market closed the week on a mildly positive note, with the NGX All-Share Index appreciating by 0.4% w/w to settle at 201,698.89 points.
April 2, 2026/Cordros Report
Global
According to the United States Department of Labor, initial jobless claims declined by 9,000 to 202,000 in the week ended 28 March, down from 211,000 in the prior week – and below market expectations of 212,000. The moderation reflects subdued layoff activity and underscores the continued resilience of the US labor market. On a non-seasonally adjusted basis, the largest declines were recorded in Michigan (-2,749), Georgia (-1,218), and Iowa (-1,086), while increases were seen in Texas (+1,800), Oregon (+1,487), and New York (+1,386). Meanwhile, the 4-week moving average fell by 3,000 to 207,750 from a revised 210,750. Looking ahead, labour market conditions are expected to remain broadly stable, supported by resilient labour demand, reduced layoffs, and firms’ preference to retain workers amid ongoing hiring frictions. However, downside risks persist, as elevated business costs and heightened geopolitical uncertainty could weigh on hiring momentum, leading to a gradual cooling in labour market conditions.
Headline inflation in the Euro Area rose sharply by 60bps to +2.5% y/y in March (February: +1.9% y/y) as reported by Eurostat, coming in slightly below market expectations of +2.6% y/y. Pertinently, the outturn marks the highest CPI print since January 2025. This uptick was primarily driven by a sharp rebound in energy prices, which more than offset easing pressures in services and food. Specifically, energy inflation surged to rebound sharply at a pace not seen since February 2023, returning to a positive territory at +4.90% y/y (February: -3.10% y/y), reflecting higher oil and gas prices amid ongoing Middle East tensions. In contrast, food inflation (+2.4% y/y vs February: +2.5% y/y) moderated due to lower prices for processed food, alcohol & tobacco (+1.7% y/y vs February: +1.8% y/y) and unprocessed food (+4.1% y/y vs February: +4.6% y/y) sub-components. Services inflation also eased to +3.2% y/y (February: +3.4% y/y), while core inflation (excluding energy, food, alcohol, and tobacco) edged lower to 2.3% y/y (vs February: +2.4% y/y), indicating that underlying price pressures remain relatively contained. On a month-on-month basis, consumer prices accelerated by +1.2%, up from +0.6% in February. Looking ahead, inflationary pressures in the Euro Area are expected to remain skewed to the upside in the near term, driven by elevated oil and gas prices amid persistent Middle East tensions. If sustained, higher energy costs could spill over into food and core inflation through rising input, transportation, and production costs, potentially reversing recent moderation. While the European Central Bank has signaled a tightening bias, a near term rate hike appears premature given the early stage of the conflict and prevailing uncertainty. As such, we expect the ECB to maintain a cautious, data dependent stance, likely keeping policy rates unchanged at its April 30 meeting.
Global Market
Bullish sentiment resurfaced in global equity markets this week despite persistent Middle East tensions. However, sentiment turned more cautious later in the week after US President Donald Trump signalled the possibility of further military action against Iran, renewing concerns around energy supply disruptions and sustaining volatility in oil markets. At the time of writing, major US indices (DJIA: +2.0%; S&P 500: +2.0%; NASDAQ 100: +2.9%) were set to close higher, supported by gains in technology, mining, and travel-related stocks. European equities (STOXX Europe 600: +2.7%; FTSE 100: +3.8%) also advanced, buoyed by energy stocks as higher oil prices lifted majors such as Shell and BP. In Asia, Japan’s Nikkei 225 (-1.7%) declined, weighed down by global growth concerns and weakness in technology and financial stocks. In contrast, Chinese equities (SSE: +0.9%) trended higher, supported by improving domestic data and a more cautious policy stance from the People’s Bank of China. Elsewhere, Emerging and Frontier market indices (MSCI EM: +1.4%; MSCI FM: +2.0%) advanced, led by gains in China (+0.1%) and Vietnam (+1.3%), respectively.
Domestic Economy
According to the Central Bank of Nigeria, the Purchasing Managers’ Index (PMI) remained above the 50.0 point threshold in March, indicating continued expansion in business activity. That said, the composite PMI moderated to 53.2 points (February: 56.4 points), reflecting a broad based slowdown across sectors amid rising price pressures and weaker business confidence. Across sectors, the Agriculture PMI eased to 52.8 points (February: 56.5 points), driven by softer growth in farming activities, new orders, inventories, and employment. Similarly, the Services PMI declined to 52.0 points (February: 55.3 points), reflecting slower activity across key sub sectors such as accommodation & food services, real estate, and administrative services, alongside weaker new orders and employment levels. The Industry PMI also moderated to 54.0 points (February: 56.8 points), as production, raw materials, new orders, employment, and delivery times all recorded weaker readings, pointing to a general slowdown in industrial activity. Looking ahead, private sector activity is expected to moderate further as elevated energy and food costs sustain inflationary pressures, while a cautious monetary policy stance is likely to keep financial conditions tight, weighing on near-term economic growth.
Based on the data from the Domestic and Foreign Portfolio Report of the Nigerian Exchange Limited (NGX), total transactions in the Nigerian equities market surged to a two-month high, rising by 78.9% m/m to NGN1.54 trillion in February (January: NGN861.97 billion). We attribute the significant increase in transactions to PenCom’s upward revision of equity allocation limits for PFAs across all RSA fund categories, which took effect in February. Specifically, domestic transactions (91.0% of total transaction) grew by 87.7% m/m to NGN1.40 trillion (January: NGN747.83 billion), supported by increased activity from both institutional (+120.3% m/m) and retail (+52.4% m/m) investors. Similarly, foreign investor participation rose by 21.8% m/m to NGN139.03 billion (January: NGN114.14 billion), reflecting improving sentiments amid moderating fixed income yields, which enhanced the relative attractiveness of equities. Consequently, net inflows strengthened significantly to NGN85.78 billion, compared to NGN3.53 billion in January. Looking ahead, domestic investors are expected to remain the primary drivers of market turnover, underpinned by the continued decline in fixed income yields, which should sustain the rotation into equities. Nonetheless, investor sentiment may likely be weighed by increasing inflation risks, which could prompt a more cautious monetary policy stance, limit the pace of decline in fixed income yields, and dampen risk appetite for equities.
Capital Markets
Equities
The domestic stock market closed the week on a mildly positive note, with the NGX All-Share Index appreciating by 0.4% w/w to settle at 201,698.89 points. The performance was supported by bargain hunting in bellwether stocks such as MTNN (+5.9%), GTCO (+5.1%), TRANSCORP (+4.2%) and UNILEVER (+10.0%). On market activity, trading was subdued, with volume declining by 27.7% w/w and value down by 42.9% w/w. Sectoral performance was mixed, as the Banking (+0.7%) index advanced, while the Insurance (-4.2%), Consumer Goods (-1.7%) and Industrial Goods (-0.2%) indices closed lower. The Oil and Gas index ended the week flat.
Looking ahead, we expect the market to trade with a cautious bias, with selective positioning likely to persist as investors begin to position ahead of Q1-26 earnings. Bargain hunting may emerge in beaten-down names; however, flows should remain concentrated in fundamentally strong counters. In addition, recent corporate actions and dividend announcements are expected to sustain interest, particularly within the banking sector.
Money Market and Fixed Income
Money Market
The OVN rate rose by 5bps w/w to 22.3% as debits for the OMO PMA (NGN2.16 trillion) was met with no OMO inflows during the period. Consequently, system liquidity moderated to an average net long position of NGN5.67 trillion down from NGN7.39 trillion in the prior week.
In the absence of liquidity management measures, system liquidity is expected to be supported by NGN2.79 trillion in OMO maturities, which should drive a moderation in the OVN rate.
Treasury Bills
The Treasury Bills secondary market traded on a bullish note, with average yields declining by 11bps to 18.8%. By segment, NTB yields compressed by 15bps to 17.6%, driven by the absence of a primary market auction, which redirected liquidity to the secondary market and exerted downward pressure on yields. Similarly, OMO yields contracted by 3bps to 20.2%. Meanwhile, the Central Bank of Nigeria conducted two OMO auctions to manage system liquidity. At the first auction, NGN600.00 billion was offered across the 8DTM, 99DTM, and 120DTM maturities, with total subscriptions of NGN1.95 trillion, split across the 8-day (NGN672.94 billion), 99-day (NGN91.15 billion), and 120-day (NGN1.18 trillion) instruments. Total allotments came in at NGN1.74 trillion, comprising NGN662.94 billion (8-day), NGN85.15 billion (99-day), and NGN992.50 billion (120-day), at respective stop rates of 21.90%, 19.89%, and 19.94%. At the second auction, NGN600.00 billion was offered, with total subscriptions of NGN1.30 trillion, split across the 70-day (NGN65.00 billion) and 140-day (NGN1.23 trillion) instruments. Total allotments came in at NGN853.75 billion, comprising NGN50.00 billion (70-day) and NGN848.75 billion (140-day), at respective stop rates of 19.90% and 19.92%.
Given our projections of a still strong system liquidity, we expect sustained demand in the secondary market, causing yields to likely decline.
Bonds
The FGN bonds secondary market was mixed, albeit with a bearish bias, as average yields increased by 2bps to 15.8%. The performance this week was driven by selloffs in the belly of the curve as investors unwound positions for settlement of bonds reopened at the auction. Across the curve, the average yield declined at the short (-1bp) and long (-6bps) ends, driven by demand for the MAR-2028 (-4bps) and JAN-2042 (-27bps) bonds, respectively, while it increased at the mid segment (+6bps) following selloffs of the MAY-2033 (+34bps) bond. Meanwhile the Debt Management Office conducted a bond auction, reopening the AUG-2030, JUN-2032 and MAY-2033 instruments, with a total offer of NGN750.00 billion. Demand came in at NGN931.50 billion (Bid-to-offer: 1.2x), with allotments of NGN485.50 billion (bid-to-cover: 1.9x) at stop rates of 16.00%, 16.15% and 16.64%, respectively.
Over the medium term, yields are expected to trend lower, supported by strong domestic liquidity conditions; however, the pace of decline may be moderated by persistent risk-off sentiments, particularly from offshore investors.
Foreign Exchange
The naira appreciated marginally by 0.1% w/w to NGN1,382.50/USD, as demand pressures were largely offset by intermittent offshore inflows and a USD100.00 million intervention by the CBN. Meanwhile, gross external reserves declined by USD260.00 million to USD49.18 billion (01 April 2026), driven in part by the recent increase in CBN FX interventions and external debt repayments, marking the third consecutive week of decline. In the forwards market, the naira rates appreciated across the 1-month (0.2% to NGN1,406.72/USD), 3-month (0.2% to NGN1,445.15/USD) and 6-month (0.1% to NGN1,4999.45/USD) contracts while the 1-year (-0.1% to NGN1,590.38/USD) contract depreciated.
We expect the naira to remain broadly stable in the near term, although downside risk persists. Despite heightened investor caution stemming from the ongoing US–Iran conflict, a relatively supportive external backdrop and elevated naira yields should continue to underpin foreign portfolio inflows, albeit at a slower pace compared to pre-conflict levels. Nonetheless, should demand pressures re-emerge, we expect the CBN to undertake measured FX interventions to contain excessive volatility.
