June 8, 2026/United Capital Update

Global Markets

United States

The Purchasing Managers’ Index (PMI) increased to 54.5 points in May 2026 from 53.6 points in April, above forecasts of 53.8 points. According to the Institute for Supply Management (ISM) Services this was its pace in three months. This is due to strong business activity, new orders and inventory accumulation that lifted the ISM Services PMI. Meanwhile, US employers announced 97,006 job cuts in May, the highest since January. This is as firms accelerated AI-driven restructuring across the technology sector. The data suggests resilient economic activity but growing labour market softness and persistent inflation risks. This could continue to support a cautious Federal Reserve policy stance and sustain global market volatility.

Euro Area

Euro Area inflation rose to 3.2% in May 2026. This is the highest level since September 2023. The rise was driven mainly by a sharp increase in energy prices amid Middle East-related supply concerns. Price pressures also strengthened across services and non-energy goods, while core inflation accelerated to 2.5%. This indicates broader underlying inflationary pressures despite slower food inflation. The persistent overshoot of the European Central Bank’s 2.0% target may delay policy easing, keeping borrowing costs elevated and weighing on global risk sentiment.

Asia

Business activity across Asia remained in expansion territory in May 2026. China’s Composite PMI rose to 50.5 points in May 2026 from 50.1 points in April 2026 as services activity recovered. Meanwhile, Japan’s Composite PMI held at 51.1 points in May 2026 from 52.2 points in April 2026, marking a 14th consecutive month of expansion. However, momentum softened amid rising energy costs, trade uncertainty, weaker external demand and intensifying cost pressures. The combination of slowing growth and elevated inflationary pressures may weigh on regional economic activity, disrupt global trade flows and sustain uncertainty in financial markets.

Oil Markets

Oil prices strengthened during the week, supported by improving demand expectations and continued concerns over global supply dynamics. Brent crude rose by 3.17% week-on-week to US$94.97/bbl, while Bonny Light crude remained unchanged at US$98.44/bbl. On a year-to-date basis, both benchmarks maintained strong gains, with Brent and Bonny Light advancing 56.07% and 55.22%, respectively. The sustained increase in oil prices reflects ongoing supply-side uncertainties and resilient demand conditions in the global energy market.

Outlook

Global markets are expected to remain cautious this week as investors await the critical US CPI data, with consensus forecasting headline inflation at around 4.2% year-on-year. An elevated number would revive rate hike fears and pressure risk assets, while a softer data would offer some relief. China trade and inflation data early in the week will also be watched for signals on global demand. The Iran conflict remains the dominant macro risk any diplomatic progress could pull oil prices lower, while a breakdown in talks risks a fresh spike reinforcing the higher-for-longer inflation narrative. US equities face headwinds from elevated Treasury yields. Emerging market assets remain under pressure from a stronger Dollar and tighter global financial conditions. Meanwhile, any escalation is likely to amplify currency pressures across vulnerable economies.

Domestic Economy

United Capital Research projects Nigeria’s headline inflation to rise to 15.94% in May 2026 from 15.69% in April 2026, marking a 0.25% increase and the third consecutive month of inflation acceleration. The anticipated uptick is largely driven by higher Premium Motor Spirit (PMS) prices, elevated transportation and logistics costs, and sustained pressure on consumer prices. The inflation outlook in the short term may drive up interest rate. Nonetheless, strong liquidity conditions within the banking system may help moderate the pace of yield adjustments. In this environment, maintaining a selective investment approach focused on fundamentally strong businesses and quality income-generating assets remains essential.

Equity Market

The Nigerian equities market closed the week on a bearish note, with the NGX All-Share Index (NGX-ASI) declining by 3.11% week-on-week to 242,593.31 points from 250,385.47 points. Despite the weekly loss, the market maintained a strong year-to-date return of 55.90%. Sectoral performance was broadly negative, as all major indices under our coverage closed in the red. The Oil & Gas Index recorded the steepest decline, falling 5.18% week-on-week, followed by the Industrial Goods Index, which shed 4.40%. The Banking Index also weakened by 3.42%, while the Insurance Index and Consumer Goods Index declined by 1.89% and 0.73%, respectively. Overall, market sentiment remained weak during the week, with broad-based profit-taking across key sectors driving the decline in equity prices. Nevertheless, year-to-date returns remained robust across all sectors, led by the Oil & Gas and Industrial Goods indices, reflecting the market’s strong performance since the beginning of the year.

Fixed Income and Money Market

The fixed income market was relatively mixed during the week, with yields exhibiting modest movements across both money market and sovereign debt instruments. In the money market, liquidity conditions remained broadly stable. The Overnight (O/N) rate declined marginally by 0.04% to 22.15%, while the Open Repo Rate (OPR) remained unchanged at 22.00%. Across the Nigerian Treasury Bill (NTB) curve, performance was mixed. The 91-day NTB yield eased slightly by 0.01% to 16.62%, suggesting mild demand at the short end. Conversely, the 182-day NTB yield increased by 0.07% to 17.42%, indicating weaker demand for medium-term paper. The 364-day NTB yield declined by 0.20% to 18.84%, reflecting stronger investor interest in longer-dated bills. In the bond market, yields were largely stable. The 3-year bond yield edged higher by 0.04% to 16.28%, the 5-year bond remained unchanged at 17.01%, and the 7-year bond yield declined marginally by 0.01% to 17.08%. Meanwhile, the 10-year bond yield was unchanged at 14.96%, highlighting sustained demand at the long end of the curve. Overall, fixed income trading reflected a cautious but selective investor sentiment. Demand remained concentrated in longer-dated Treasury bills and long-tenor bonds, while yield movements across other maturities were largely muted.

Outlook:

Equity Market

The Nigerian equity market is expected to trade with a mildly positive bias this week as investors take advantage of recent price corrections to accumulate fundamentally strong stocks. While profit-taking may persist in some counters, bargain hunting is likely to support select banking, industrial, and oil & gas stocks. Market sentiment will remain influenced by fixed income yields and broader macroeconomic developments. Nevertheless, strong corporate fundamentals and improved economic conditions are expected to sustain selective buying interest, resulting in cautious but opportunity-driven trading during the week.

Fixed Income Market

Fixed income markets are expected to maintain a cautious tone this week as investors continue to balance attractive yields against expectations of future monetary policy direction. Demand is likely to remain concentrated in selected NTB and bond maturities, particularly at the longer end of the curve, where investors may seek to lock in prevailing yields. Liquidity conditions and primary market activities will remain key drivers of market sentiment, while institutional investors are expected to continue positioning strategically across the yield curve. Consequently, yields are expected to remain broadly stable, with modest movements across maturities reflecting selective demand and portfolio rebalancing activities.