Global Markets

United States

The Institute for Supply Management (ISM) Services Purchasing Managers’ Index (PMI) for the United States eased slightly to 53.6 points in April 2026, down from 54.0 points in March 2026, indicating that the services sector continued to expand but at a slower pace. The reading marked the 22nd consecutive month of expansion, though momentum softened as new orders moderated and employment conditions weakened further into contraction territory. Overall, the data points to continued resilience in the US services sector, but with signs of cooling demand amid a more cautious macroeconomic environment. Input costs also remained elevated, reflecting persistent inflationary pressures, which could reinforce expectations that the Federal Reserve (Fed) will maintain a restrictive policy stance for longer.

Euro Area

Euro Area annual inflation rose to 3.0% in April 2026, up from 2.6% in March 2026 and slightly above market expectations of 2.9%, marking the highest level since September 2023. The acceleration was largely driven by energy prices, which surged 10.9% year-on-year, the strongest increase since February 2023, reflecting the pass-through from ongoing geopolitical tensions in the Middle East. Underlying inflation was mixed, with modest increases in goods prices offset by easing services inflation and a slight decline in core inflation, suggesting some softening in underlying price pressures.

Asia

Japan’s manufacturing activity strengthened significantly in April 2026, with the final Manufacturing PMI rising to 55.1 points in April 2026 from 52.4 points in March 2026, marking the strongest expansion in over four years. The improvement was driven by stronger export demand, AI-related orders, and precautionary inventory build-up amid concerns over potential supply disruptions. However, rising input costs and worsening supply chain disruptions continued to pose downside risks to the sector’s outlook.

Oil Markets

Oil markets moderated during the week, as easing supply concerns and profit-taking activities weighed on prices despite persistent geopolitical tensions. Bonny Light crude declined by 6.74% week-to-date to settle at US$127.63/bbl, while Brent crude fell by 9.40% to close at US$100.06/bbl. Nonetheless, both benchmarks maintained strong year-to-date gains of 101.25% and 64.44%, respectively, reflecting the broader impact of geopolitical uncertainty and earlier supply disruptions on global oil prices.

Outlook

Global markets are expected to trade cautiously this week, as the Fed’s decision to hold rates and Powell’s hawkish tone reinforce the higher-for-longer narrative. Attention shifts to incoming inflation data and Middle East developments, where the fragile US-Iran ceasefire and Strait of Hormuz disruptions could keep Brent crude elevated. Equities would face a mixed backdrop, with AI, technology and energy stocks supporting valuations. Emerging markets remain under pressure from a stronger Dollar and tighter financial conditions. Overall, markets are likely to remain range-bound and volatile, with geopolitical developments, central bank commentary, and inflation data could be the key drivers of the global markets.

Domestic Economy

United Capital Research projects Nigeria’s headline inflation rate to rise slightly to 15.54% in April 2026, from 15.38% in March. This is driven largely by higher energy prices stemming from the ongoing US-Iran conflict and its impact on consumer goods prices. If realised, this would mark the second consecutive monthly increase ahead of the Central Bank of Nigeria’s upcoming Monetary Policy Committee (MPC) meeting. Despite the expected uptick, United Capital Research does not anticipate an immediate policy rate adjustment, given the potential impact of tighter monetary conditions on borrowing costs and economic activity. We also expect continued Naira stability and improved oil-driven government revenues to help moderate inflationary pressures and support targeted fiscal interventions.

Equity Market

The Nigerian Exchange All Share Index (NGX-ASI) sustained its positive momentum during the week, rising by 0.99% week-on-week from 242,277.81 points to close at 244,670.65 points, bringing the year-to-date return to 57.23%. Sectoral performance was broadly positive, led by gains in the Industrial Goods and Insurance indices, which advanced by 5.11% and 4.01% respectively. The Banking and Consumer Goods indices also recorded gains of 1.89% and 1.81% respectively, while the Oil & Gas index declined by 3.27% during the week.

Fixed Income and Money Market

The fixed income market reflected mixed sentiment during the week, with yields trending slightly higher across most instruments despite relatively stable liquidity conditions. In the money market, the Overnight (O/N) rate increased by 0.14% to 22.25%, while the Open Repo Rate (OPR) remained unchanged at 22.00%, indicating sustained liquidity moderation in the system. In the Nigerian Treasury Bills segment, yields advanced across all maturities, suggesting cautious investor sentiment and mild sell pressure. The 91-day, 182-day, and 364-day NTB yields rose to 16.42%, 17.55%, and 18.90%, respectively. Performance in the bond market was mixed. The 5-year bond yield declined marginally by 0.09% to 16.71%, reflecting selective buying interest at the mid-tenor segment. However, yields at the longer end edged higher, with the 7-year and 10-year bonds increasing to 16.84% and 14.96%, respectively, while the 3-year bond remained unchanged at 16.18%. Overall, the market maintained a cautious tone, with modest upward yield adjustments across most fixed income instruments amid balanced liquidity conditions and selective demand.

Outlook:

Equity Market

The Nigerian equity market is expected to remain resilient this week, supported by ongoing macroeconomic reforms, elevated oil prices, and sustained foreign investor participation. Banking, Building Materials and Oil & Gas stocks are likely to stay in focus, with the Q1 2026 earnings season serving as the next key catalyst for validating current valuations. Looking ahead, potential catalysts such as the FTSE Russell reclassification and a possible Dangote Refinery listing could prove transformative for market depth and foreign capital inflows. Nonetheless, near-term headwinds persist, including profit-taking at record index levels, Naira volatility, and broader global risk-off sentiment. Overall, the market is poised to trend higher, albeit with a shift away from broad-based rallies toward a more selective, earnings-driven environment.

Fixed Income Market

The Nigerian fixed income market is expected to remain active this week, with system liquidity and Central Bank of Nigeria (CBN)’s Open Market Operations (OMO) continuing to anchor short-term yields. Treasury bill demand should stay firm, particularly at the short end, where real returns remain attractive to both domestic and foreign investors. At the long end, the 10-year yield currently around 14.95% is expected to remain broadly stable. Significant compression unlikely given the Fed’s hawkish hold and the risk of capital outflows should the CBN ease policy prematurely relative to global peers.