Profit taking dominated the domestic stock market this week, with the All-Share Index closing lower 4.0% w/w to 235,941.27points in all five trading sessions as investors locked in gains across select large cap names.
June 19, 2026/Cordros Report
Global
At its fourth meeting of the year and first under Fed Chair Kevin Warsh, the FOMC voted unanimously to maintain the federal funds target range at 3.50%–3.75%, in line with market expectations. Notably, the Committee issued a much shorter policy statement and removed much of its forward-looking guidance, signalling a more data-dependent approach amid elevated uncertainty. The Committee noted that economic activity continues to expand at a solid pace despite risks linked partly to the Middle East conflict. Labour market conditions also remained resilient, with the economy adding 172,000 jobs in May 2026 (April: +179,000), while unemployment stayed low at 4.3%. However, inflation remains the key concern, with headline inflation at 4.2% y/y in May, still above the Fed’s 2.0% target. Reflecting this backdrop, the Fed lowered its 2026FY growth forecast to 2.2% y/y (Previous: 2.4%) and raised its inflation forecast to 3.6% y/y (Previous: 2.7%). Meanwhile, the updated dot plot signalled a hawkish shift, with the median year-end funds rate projection rising to 3.8% (previous: 3.4%). At its next meeting, we expect the Fed to keep rates unchanged as the Committee continues to assess incoming data. While inflation remains elevated, we note that the recently brokered ceasefire deal between the US and Iran has already begun to lower energy prices, slowing the overall pace of price pressures and reducing the need for immediate policy tightening. This view aligns with market pricing, and the CME’s FedWatch indicates a 67.9% probability of a “HOLD” decision at the 29 July meeting.
At its June policy meeting, the Bank of England (BoE) voted by a 7–2 majority to keep the Bank Rate unchanged at 3.75% – in line with market expectations, with only two members favouring an additional 25bps hike to 4.00%. The decision came as policymakers weighed the latest inflation print, which held at 2.8% y/y in May (the same level as April 2026), amid continued uncertainty in global energy markets linked to tensions in the Middle East. Despite recent developments, such as the ceasefire between the US and Iran, which lowered oil prices, the Bank noted that energy costs remained elevated and unstable compared with pre-conflict levels. At the same time, the Bank noted that it expects inflation to remain high as elevated energy prices begin to have their second-round effects on the broader economy. Looking ahead, we expect the BoE to maintain its policy rate in the near term, as policymakers attempt to contain the price pressures without further weakening an already subdued economy. Meanwhile, the softer wage growth and the reopening of the Strait of Hormuz reduce the upside risks to energy prices and overall headline inflation.
Global Markets
Global equities advanced this week as investors welcomed signs of de-escalation in the Middle East following the announcement of an interim agreement between the United States and Iran. Market participants also assessed monetary policy decisions by the US Fed, the BoE and the BoJ. Accordingly, major US indices (DJIA: +0.7%; S&P 500: +0.9%; NASDAQ: +2.4%) closed the week higher, as optimism over the US-Iran deal offset concerns over a hawkish Federal Reserve. Meanwhile, European equities were mixed, as the STOXX Europe 600 (+0.6%) reached a record high as easing geopolitical tensions following the US–Iran agreement supported risk sentiment, while the FTSE 100 (-0.7%) declined, pressured by weakness in energy and mining names following the pullback in oil and commodity prices. Elsewhere, Asian markets (SSE: +1.5%; Nikkei 225: +7.9%) advanced, on easing geopolitical tensions and sustained AI momentum. Japanese equities surged to record highs, led by technology heavyweights, while Chinese stocks gained on government measures to support listings in strategic high-technology industries. Finally, the Emerging and Frontier Markets (MSCI EM: +4.3%; MSCI FM: +1.6%) indices advanced, supported by gains in South Korea (+11.4%) and Morocco (+4.2%), respectively.
Domestic Economy
According to the National Bureau of Statistics (NBS), headline inflation rose by 24bps to 15.93% y/y in May (April: 15.69% y/y), marking the third consecutive month of increase. The reading primarily reflects an uptick in both food and core inflation. Specifically, the food index rose by 90bps to 16.96% y/y (April: 16.06% y/y), reflecting still tight food supply driven by limited access to farmland due to persistent insecurity, inadequate irrigation and elevated input costs. Core inflation surged by 97bps to 16.82% y/y (April: 15.85% y/y), driven by higher fuel prices feeding into transport and business costs. On a month-on-month basis, headline inflation slowed to 1.75% (April: 2.13% m/m), reflecting softer energy price increases and easing food price pressures. Inflationary pressures are expected to ease in June, due to moderating global energy prices, continued naira stability and the onset of the early green harvest season. Overall, we expect inflation to slow to 1.66% m/m in June (May: +1.75% m/m), with the y/y rate moderating slightly to 15.91% (May: 15.93% y/y).
Based on the data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil production (including condensates) rose to a 10-month high of 1.70 mb/d in May (April: 1.66 mb/d), marking the third consecutive month of increase. We attribute the outturn primarily to a rebound in production from the Forcados terminal (+22.2% m/m to 8.99 mb/d), following loading disruptions in March and April that suppressed throughput. Notably, volumes from the Qua Iboe (+8.7% m/m), Brass (+8.4% m/m), Odudu (+5.3% m/m), Tulja-Okwuibome (+3.8% m/m), Bonny (+2.9% m/m) and Escravos (+1.7% m/m) terminals increased, while declines were recorded across the Anyala Madu (-13.8% m/m) and Akpo (-13.6% m/m) terminals. Looking ahead, crude oil production is expected to increase in the near term, underpinned by higher investment, improved security conditions, and the integration of new oil fields and evacuation routes. However, intermittent terminal shutdowns, partly reflecting persistent infrastructure constraints, remain key downside risks. Overall, we project average oil production of 1.75 mb/d in 2026E.
Capital Markets
Equities
Profit taking dominated the domestic stock market this week, with the All-Share Index closing lower in all five trading sessions as investors locked in gains across select large cap names. Precisely, losses in GTCO (-15.0%), FIRSTHOLDCO (-20.3%), ZENITHBANK (-11.7%), DANGCEM (-3.6%), and GEREGU (-10.0%) dragged the benchmark index down 4.0% w/w to 235,941.27points. Consequently, month to date and year to date returns moderated to -5.8% and +51.6%, respectively. Trading activity softened during the week, as total volume and value traded declined by 50.0% w/w and 0.4% w/w, respectively. Sector performance was broadly negative, as the Banking (-10.5%), Insurance (-7.2%), Industrial Goods (-4.1%), Consumer Goods (-1.6%) and Oil & Gas (-1.1%) indices all closed lower.
Next week, we expect elevated Treasury bill yields to remain a key headwind for the equities market, as attractive risk-adjusted returns continue to divert investor flows from risk assets.
Money Market and Fixed Income
Money Market
The OVN rate expanded by 4bps w/w to 22.2% as net NTB PMA debits (NGN1.31 trillion) offset inflows from OMO maturities (NGN1.15 trillion). Notwithstanding, system liquidity remained robust with the average net long position settling at NGN4.21 trillion compared to NGN4.19 trillion in the prior week.
In the absence of any mop up operations by the CBN, system liquidity is expected to remain strong, further bolstered by inflows of NGN2.93 trillion from OMO maturities and NGN216.76 billion from FGN Bond coupon payments.
Treasury Bills
The Treasury bills secondary market traded on a bearish note with average yields across all instruments expanding by 31bps to 19.2%. Across the market segments, average yields in the NTB secondary market expanded by 46bps to 18.2%, as investors repriced yields higher following the outsized issuance (NGN1.00 trillion) from the DMO at Wednesday’s auction. Meanwhile, average yields in the OMO secondary market expanded by 10bps to 21.1%. At Wednesday’s NTB auction, the DMO offered NGN1.00 trillion across tenors, with total demand reaching NGN1.86 trillion. Ultimately, the DMO allotted NGN1.49 trillion, with stop rates expanding by 23bps, 31bps and 99bps to settle at 16.28%, 16.50% and 17.34% for the 91-, 182- and 364-day tenors, respectively.
In the coming week, we expect mixed trading in the Treasury bills secondary market, as robust system liquidity is likely to support demand and exert downward pressure on yields, while elevated supply may temper yield compression by weighing on secondary market prices.
Bonds
The FGN bond secondary market traded on a bearish note, with the average yield expanding by 24bps to 16.9%, due to expectations of increased supply at next week’s auction (22 June 2026), as the DMO is scheduled to offer NGN1.20 trillion. Across the benchmark curve, the average yield expanded at the mid (+35bps) and long (+6bps) segments, driven by selloffs of the MAR-2036 (+183bps) and APR-2037 (+24bps) bonds, respectively, while the short (-16bps) end contracted due to demand for the MAR-2027 (-126bps) bond.
Over the medium term, we expect yields to remain elevated driven by the government’s elevated borrowing programme and continued risk off sentiment, especially from offshore investors.
Foreign Exchange
The naira depreciated by 0.2% w/w to settle at NGN1,365.50/USD, reflecting domestic demand pressure. Meanwhile, gross external reserves increased by USD529.70 million to USD51.04 billion (18 June 2026), marking the sixth consecutive week of growth. In the forwards market, the naira rates depreciated across the 1-month (-0.4% to NGN1,391.35/USD), 3-month (-0.3% to NGN1,432.97/USD), 6-month (-0.2% to NGN1,490.84/USD) and 1-year (-0.3% to NGN1,607.79/USD) contracts.
We expect the naira to remain broadly stable in the near term, underpinned by resilient portfolio inflows, strong market confidence, and a firm current account surplus. However, if the US-Iran ceasefire breaks down and triggers portfolio outflows, we expect the CBN to deploy measured FX interventions to contain excessive exchange rate volatility.
