The local bourse closed lower for the third consecutive week, pressured by profit-taking in blue-chip tickers. Specifically, losses in MTNN (-9.6%), DANGCEM (-7.5%), ARADEL (-10.0%), WAPCO (-8.3%), ZENITHBANK (-7.1%) and GTCO (-5.4%), dragged the All-Share Index down by 1.1% w/w to 229,240.34 points.
July 3, 2026/Cordros Report
Global
According to the Bureau of Labor Statistics, US non-farm payrolls increased by 57,000 in June, down from a revised 129,000 in May and below market expectations of 110,000. The weaker print reinforces signs of cooling labour demand, as still tight monetary policy and softening consumer demand continue to weigh on hiring decisions. Parsing through the data, we highlight gains in the professional and business services (+36,000), social assistance (+25,000), and healthcare (+22,000) sectors, though healthcare hiring remained below its 12-month average. In contrast, leisure and hospitality employment declined by 61,000, reflecting weaker-than-usual seasonal hiring, while most other major sectors showed little change. Meanwhile, the unemployment rate held steady at 4.2%, partly reflecting a 30bps fall in labour force participation to 61.5%, its lowest level in five years. Looking ahead, we expect the US labour market to remain broadly stable, supported by the prevailing low hiring, low firing environment, and still firm economic activity. However, the pace of employment gains is likely to remain moderate as the tight financial conditions associated with restrictive monetary policy continue to weigh on business hiring decisions.
According to Eurostat estimates, Eurozone headline inflation eased for the first time in five months, falling to 2.8% y/y in June (vs May: +3.2% y/y) – below market expectations of 3.0%. The moderation was largely driven by slower energy price growth, as energy inflation eased to 8.7% y/y (May: +10.8% y/y), reflecting lower price pressures following the ceasefire agreement between the US and Iran, and the reopening of the Strait of Hormuz. Elsewhere, food inflation eased to 1.6% y/y (May: +1.9% y/y), supported by slower growth in unprocessed food prices. Services inflation also moderated to 3.2% y/y (May: +3.5% y/y), while non-energy industrial goods inflation was unchanged at 0.9% y/y. At the same time, core inflation slowed by 20bps to 2.4% y/y (May: +2.6% y/y). On a month-on-month basis, consumer prices declined by 0.1% (May: +0.1% m/m), reflecting softer energy-related price pressures. Looking ahead, inflationary risks are expected to recede, reflecting lower energy prices, provided the US–Iran ceasefire holds and hostilities do not re-escalate. Although inflation remains above the ECB’s 2.0% target, disinflation is likely to continue in the coming months, with wage-related second-round effects still relatively contained. Accordingly, we expect the ECB to hold policy rates at its July 23 meeting, balancing lingering inflation risks against a softening in output growth.
Global Market
Global equities advanced this week, as easing geopolitical tensions and supportive macroeconomic data lifted investor sentiment. Optimism surrounding the resumption of US-Iran peace talks in Doha kept oil prices subdued, easing inflation concerns across major economies. Meanwhile, softer US jobs data reduced expectations of an imminent Federal Reserve rate hike, providing further support for risk assets. Accordingly, major US indices (DJIA: +2.0%; S&P 500: +1.8%; NASDAQ: +2.1%) closed the week higher, supported by easing US-Iran tensions, moderating inflation risks, and sustained gains in select AI and technology-related names. Similarly, European equities (STOXX Europe 600: +2.4%; FTSE 100: +1.8%) advanced, buoyed by gains in the defensive, pharmaceutical and aerospace names, as easing concerns over a potential hawkish shift by the Fed and softer than expected preliminary inflation prints across the region lifted sentiment. Elsewhere, the Asian markets (SSE: +0.4%; Nikkei 225: +0.6%) advanced, mirroring the broadly positive tone across global markets. The region’s performance was further supported by stronger-than-expected PMI data from China and better-than-expected retail sales data in Japan. Finally, the Emerging Market (MSCI EM: -1.3%) index declined, dragged by losses in South Korea (-3.8%), while the Frontier Market (MSCI FM: +1.4%) index advanced, supported by gains in Romania (+7.5%).
Domestic Economy
Based on the data from the Domestic and Foreign Portfolio Report of the Nigerian Exchange (NGX), total transactions in the Nigerian equities market rose by 7.8% m/m to NGN1.94 trillion in May (April: NGN1.80 trillion). The performance was driven by higher domestic participation, with domestic transactions rising 13.2% m/m to NGN1.76 trillion (April: NGN1.56 trillion), following increases in transactions from institutional investors (+18.6% m/m) and retail investors (+6.2% m/m). Meanwhile, transactions from foreign investors declined by 25.9% m/m to NGN183.61 billion (April: NGN247.78 billion). On balance, net outflows rose sharply by 141.1% m/m to NGN61.01 billion (April: NGN25.30 billion), driven by net domestic outflows (NGN52.60 billion) alongside net foreign outflows (NGN8.41 billion). Looking ahead, we expect domestic investors to remain the primary drivers of market turnover. However, with fixed income yields staying elevated, the rotation into equities is likely to remain measured, as relatively attractive fixed income returns continue to compete for domestic flows. Furthermore, sticky inflation and a still cautious monetary policy stance could keep yields elevated for longer, capping risk appetite for equities in the near term.
Based on FMDQ data, total inflows into the Nigerian Foreign Exchange Market (NFEM) declined by 20.7% m/m to USD3.31 billion in June (May: USD4.17 billion), reflecting weaker inflows from both local and foreign sources. Local inflows (48.9% of total inflows) fell by 30.1% m/m to USD1.62 billion (May: USD2.32 billion), driven by declines across Exporters/Importers (-32.5% m/m), non-bank corporates (-30.5% m/m) and CBN (-12.1% m/m) segments, despite higher inflows from individuals (+70.0% m/m). Similarly, foreign inflows, which accounted for 51.1% of total inflows, declined by 9.0% m/m to USD1.69 billion (May: USD1.86 billion), as the decline in FPI inflows (-13.9% m/m) outweighed the increases from the FDI (+37.8% m/m) and other corporates (+324.9% m/m). Within FPI, the decline was led by a 16.3% m/m drop in fixed income inflows, which more than offset the 43.8% m/m increase in equity inflows. In the near term, we expect foreign exchange inflows from both local and foreign sources to remain resilient, supported by sustained market confidence and still attractive carry-trade opportunities. That said, lingering global uncertainties, particularly geopolitical tensions, may keep foreign investors cautious and constrain the pace of growth in FX liquidity.
Capital Markets
Equities
The local bourse closed lower for the third consecutive week, pressured by profit-taking in blue-chip tickers. Specifically, losses in MTNN (-9.6%), DANGCEM (-7.5%), ARADEL (-10.0%), WAPCO (-8.3%), ZENITHBANK (-7.1%) and GTCO (-5.4%), dragged the All-Share Index down by 1.1% w/w to 229,240.34 points. Consequently, the month-to-date and year-to-date returns settled at +1.6% and +47.3%, respectively. On market activity, trading volume and value advanced by 61.2% w/w and 13.8% w/w, respectively. Sectoral performance was negative as the Industrial Goods (-4.9%), Oil & Gas (-4.3%), Banking (-3.7%), Insurance (-2.5%), and Consumer Goods (-1.6%) indices all closed lower.
Looking ahead, we expect market sentiment to improve as investors selectively accumulate beaten-down stocks at attractive entry points, favouring fundamentally sound counters ahead of the H1-26 earnings season. Nonetheless, elevated yields on government instruments are expected to sustain competition for investor liquidity, with anticipated primary market activity remaining a headwind to equities.
Money Market and Fixed Income
Money Market
The OVN rate contracted by 5bps to 22.2% as inflows from OMO (NGN2.31 trillion) maturities offset debits for the OMO (NGN1.17 trillion) PMA. Ultimately, system liquidity strengthened to an average net long position of NGN4.10 trillion, up from NGN3.57 trillion in the previous week.
In the absence of any mop up operations by the CBN, system liquidity is expected to further improve, driven by inflows from OMO (NGN2.21 trillion) maturities.
Treasury Bills
The Treasury bills secondary market traded on a bearish note, with average yields across all instruments expanding by 35bps to 19.9%. Across the segments, average yield in the NTB secondary market expanded by 9bps to 18.8%, reflecting investor expectations of increased supply following the publication of the Q3-26 Nigerian Treasury Bill auction calendar. Meanwhile, average yield in the OMO secondary market expanded by 25bps to 21.8%. For context, the CBN held two OMO PMAs this week – the first on Monday and the other on Tuesday. At Monday’s OMO auction, the CBN offered NGN600.00 billion across tenors, with total demand reaching NGN1.05 trillion. Eventually, the CBN allotted NGN947.00 billion, with stop rates settling at 21.71% and 20.06% for the 22- and 134-day tenors, respectively. At Tuesday’s OMO auction, the CBN offered NGN600.00 billion across tenors, with total demand reaching NGN1.59 trillion. The CBN eventually allotted NGN1.40 trillion, with stop rates settling at 21.90% and 19.80% for the 7-, 161-day tenors, respectively.
In the coming week, we expect mixed trading in the Treasury bills secondary market, with robust system liquidity supporting demand, while elevated supply constrains the scope for further yield compression. Additionally, the DMO is scheduled to conduct an NTB PMA next Wednesday (July 8), with NGN700.00 billion in bills expected to be offered.
Bonds
The FGN bond secondary market traded on a bearish note, with the average yield expanding by 8bps to 17.8%, as offshore demand moderated amid growing focus on the sizeable Q3-26 issuance calendar. Across the benchmark curve, the average yield contracted at the short (-20bps) end due to demand for the MAR-2027 (-112bps) bond, while the mid (+13bps) and long (+14bps) segments expanded, driven by selloffs of the JUL-2034 (+106bps) and JUN-2038 (+170bps) bonds, respectively.
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 appreciated 0.8% w/w to NGN1,373.00/USD, supported by increased offshore supply, with the CBN supplementing market liquidity through a USD170.00 million intervention sale. Meanwhile, gross external reserves increased by USD170.00 million to USD51.46 billion (30 June 2026), marking its eighth consecutive week of growth. In the forwards market, the naira rates appreciated across the 1-month (+0.5% to NGN1,393.36/USD), 3-month (+0.4% to NGN1,432.16/USD) and 6-month (+0.2% to NGN1,488.67/USD) contracts, while it depreciated for the 1-year (-0.2% to NGN1,601.20/USD) contract.
We expect the naira to remain broadly stable in the near term, underpinned by resilient portfolio inflows, strong market confidence, and an improved 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.