June 29, 2026/United Capital Update
Global Markets
United States
The United States’ Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred measure of inflation, rose to 4.1% year-on-year in May 2026. This is an acceleration from 3.8% in April 2026, marking its highest level since April 2023 and matching market expectations. Core PCE inflation, which excludes volatile food and energy prices, rose slightly to 3.4% in May 2026 from 3.3% in April 2026. The continued increase in both headline and core inflation suggests underlying price pressures remain elevated. This reinforces expectations that the Federal Reserve will maintain a cautious stance on interest rate cuts. This could keep global financial conditions tighter for longer and support higher US Treasury yields and the US Dollar.
Euro Area
The Euro Area Services Purchasing Managers’ Index (PMI) Business Activity Index rose to 48.9 points in June 2026 from 47.7 points in May 2026. This is the highest level in three months and above market expectations of 48.5 points. This reading signals a slower decline in services activity as business conditions continue to stabilise. If sustained, the improving trend could support economic activity in the Euro Area and strengthen expectations that the European Central Bank (ECB) will consider easing monetary policy as inflationary pressures moderate.
Asia
In Asia, Japan’s S&P Global Composite Purchasing Managers’ Index (PMI) rose to 52.5 points in June 2026 from 51.1 points in May 2026. This marks the highest level since March and the 15th consecutive month of private sector expansion. The improvement was driven by the strongest manufacturing output growth since January 2022, alongside continued expansion in the services sector. This development points to continued resilience in Japan’s economy, but persistent cost pressures and weaker business sentiment could temper the pace of future growth.
Oil Markets
Oil prices declined further during the week as easing geopolitical tensions in the Middle East weighed on prices. Brent crude fell by 5.04% week-on-week to US$75.50/bbl, while Bonny Light declined by 10.93% to US$72.70/bbl. The bearish sentiment was further reinforced by expectations of ample global oil supply, including anticipated output increases from OPEC+. Also, concerns that softer global economic growth could dampen crude demand in the coming months supported performance.
Outlook
Global markets are expected to remain cautiously optimistic in the week ahead. Markets will be supported by the improving prospects for a lasting US-Iran peace agreement and resilient economic fundamentals. Markets will also be supported by the resilient economic data from the US and Asia, and improving business confidence in Europe, despite the geopolitical risks. Eyes will particularly be on the security situation around the Strait of Hormuz, where any renewed disruption could trigger risk aversion. Meanwhile, the Federal Reserve’s hawkish stance is expected to keep the US Dollar and Treasury yields elevated, potentially weighing on emerging market assets. In oil markets, Brent crude is likely to remain under pressure. This will be on the back of easing geopolitical tensions, recovering Persian Gulf exports and expectations of a global supply surplus improve the supply outlook. However, prices are expected to remain highly sensitive to geopolitical developments.
Domestic Economy
Nigeria’s broad money supply (M3) rose to ₦129.21 trillion in May 2026, from ₦124.99 trillion in April 2026 and ₦123.36 trillion in January. This represents a ₦5.85 trillion increase over the first five months of the year. On a year-on-year basis, M3 expanded by 8.6% from ₦119.01 trillion in May 2025, reflecting sustained growth in liquidity within the financial system. The expansion was largely driven by a sharp increase in net domestic assets, which rose to ₦102.26 trillion in May 2026. Looking ahead, with inflationary pressures still elevated, the Central Bank of Nigeria is likely to maintain a cautious monetary policy stance. The Apex Bank will rely on liquidity management tools to contain excess liquidity and maintain exchange rate stability.
Equity Market
The Nigerian equities market closed the week on a negative note, with the NGX All-Share Index (NGX-ASI) falling by 1.65% week-on-week to 232,049.02 points. Consequently, the year-to-date return moderated to 49.12%. Sectoral performance was mostly negative, as four out of the five major indices under our coverage closed in the red. The Oil & Gas Index recorded the steepest decline, falling 9.86% week-on-week, followed by the Industrial Goods Index, which lost 8.21%. Similarly, the Insurance Index declined by 4.39%, while the Consumer Goods Index shed 1.53%. The Banking Index was the sole gainer, rising by 3.51%. Overall, market sentiment remained cautious during the week as investors continued to rebalance portfolios and take profits in some previously strong-performing stocks. The current market condition provides strong opportunities for investors to re-enter.
Fixed Income and Money Market
The fixed income market was bearish during the week, with yields exhibiting upward movements across the curve. In the money market, liquidity conditions remained broadly stable. The Overnight (O/N) rate increased slightly by 0.02% to 22.21%, while the Open Repo Rate (OPR) remained unchanged at 22.00%. Across the Nigerian Treasury Bill (NTB) curve, performance was bearish. The 91-Day, 182-Day and 364-Day NTB yields increased by 0.18%, 1.14% and 1.56% to 17.02%, 19.02% and 20.85% respectively, indicating weaker demand across board. In the bond market, yields were also higher across board. The 3-year, 5-year, 7-year and 10-year bond yields increased significantly by 0.15% and 0.37%, 0.85% and 0.76% to 17.28%, 18.01%, 18.23% and 17.55% respectively. This highlights shifting investor positioning and short-term market re-pricing.
Outlook:
Equity Market
The Nigerian equity market is expected to trade mixed in the week ahead as bargain hunting competes with continued profit-taking. Investors are likely to focus on fundamentally strong stocks, particularly in the banking, industrial and consumer goods sectors, supported by resilient corporate fundamentals ahead of H1 financials release. Strong external reserves and relative exchange rate stability continue to support investor confidence, although elevated fixed-income yields may limit demand for equities as investors weigh returns across asset classes. Market sentiment will be influenced by movements in oil prices, exchange rate developments and corporate releases, with sector rotation expected to remain a key feature of trading.
Fixed Income Market
The Nigerian fixed income market is expected to maintain a cautious tone in the week ahead. Yields are likely to remain elevated as the Central Bank of Nigeria (CBN) continues to tighten liquidity conditions through Treasury Bill and Open Market Operation (OMO) auctions. Investors are expected to maintain a preference for short- and medium-dated instruments, particularly the 364-day Treasury Bill. Meanwhile, demand for longer-dated Federal Government of Nigeria (FGN) bonds is likely to remain selective. Market sentiment will be driven by liquidity conditions, auction outcomes and inflation expectations, with the Central Bank’s hawkish monetary policy stance expected to keep upward pressure on yields across the curve.