July 6, 2026/United Capital Update
Global Markets
United States
The United States Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) eased to 53.3 points in June 2026 from 54.0 points in May 2026. The ISM dropped below market expectations of 54.0 points, indicating a moderation in manufacturing activity. The slowdown was driven by softer growth in output and new orders, while the employment index remained in contraction despite showing signs of improvement. Meanwhile, the price index declined sharply, pointing to easing input cost pressures, although price levels remained elevated. Survey respondents cited some key factors weighing on the manufacturing sector, these factors are: geopolitical tensions in the Middle East, higher interest rate risks, and uncertainty surrounding tariffs and global trade policies.
Euro Area
Euro Area headline inflation eased to 2.8% year-on-year in June 2026 from 3.2% in May 2026, coming in below market expectations of 3.0% and marking its lowest level since February 2026. The decline was primarily driven by a slowdown in energy price inflation, alongside softer price growth in services and food, alcohol and tobacco. Core inflation, which excludes energy and food, also moderated to 2.4% from 2.6%, indicating a broad-based easing in underlying price pressures. Although inflation remains above the European Central Bank (ECB) 2.0% target, the latest data suggest that inflationary pressures are gradually moderating. This reinforces expectations of a more measured approach to future monetary policy.
Asia
China’s RatingDog General Services PMI edged down to 54.1 points in June 2026 from 54.4 points in May 2026. But exceeded market expectations of 53.0 points, indicating continued strong expansion in the services sector. Growth was supported by resilient domestic demand and stronger export business, while employment increased for a second consecutive month. Although input cost pressures eased, output price inflation accelerated, and business confidence remained positive.
Oil Markets
Oil prices declined further during the week as easing geopolitical tensions in the Middle East continued to weigh on the market. Brent crude fell by 5.00% week-on-week to US$71.50/bbl, while Bonny Light declined by 3.94% to US$71.63/bbl. The bearish sentiment was reinforced by expectations of increased global oil supply. Anticipated output hikes from OPEC+, alongside concerns that slower global economic growth could weaken crude oil demand in the coming months and also depress the oil market
Outlook
Global markets are expected to remain cautiously optimistic this week, supported by improving prospects for a lasting US-Iran ceasefire and resilient US and Asian economic data. Eyes will particularly be on the Strait of Hormuz, where any renewed disruption could trigger an increase in both consumer and producers items. Meanwhile, the Fed’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 on the back of easing geopolitical tensions, recovering Gulf exports, and expectations of a global supply surplus. However, prices are expected to remain highly sensitive to geopolitical developments.
Domestic Economy
United Capital Research projects Nigeria’s headline inflation to edge up to 15.95% in June 2026 from 15.93% in May, marking a fourth consecutive monthly increase. The uptick is expected to be driven by higher prices of tomatoes and yam. This is due to seasonal supply constraints, partly offset by lower Premium Motor Spirit (PMS) prices, easing crude oil prices, and a marginal appreciation of the Naira. Looking ahead, we expect inflation to moderate as the harvest season improves food supply. Consequently, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) will maintain its current monetary policy stance when it meets in July
Equity Market
The Nigerian equities market closed the week on a negative note, with the NGX All-Share Index (NGX-ASI) declining by 1.21% week-on-week to 229,240.34 points. However, the market showed signs of a recovery on Friday. Consequently, the year-to-date return moderated to 47.31%. Sectoral performance was broadly bearish, as all five major indices under our coverage closed lower. The Industrial Goods Index recorded the steepest decline, falling 4.93% week-on-week, followed by the Oil & Gas Index (-4.34%), the Banking Index (-3.72%), the Insurance Index (-2.52%), and the Consumer Goods Index (-1.60%).
Fixed Income and Money Market
The fixed income market was mixed during the week, with divergent movements across the money market, Treasury bills, and bond segments. In the money market, liquidity conditions remained relatively stable as the Overnight (O/N) rate edged down by 0.03% to 22.18%, while the Open Repo Rate (OPR) remained unchanged at 22.00%. Across the Nigerian Treasury Bill (NTB) market, yields were largely lower as the 91-day and 182-day tenors declined by 0.20% and 0.11% to 16.82% and 18.91%, respectively. This reflects improved demand, while the 364-day yield edged up by 0.04% to 20.89%. In contrast, the bond market remained bearish, with yields rising across all benchmark maturities. The 3-year, 5-year, 7-year and 10-year bond yields increased by 0.70%, 0.23%, 0.17% and 0.99% to 17.98%, 18.24%, 18.40% and 18.54%, respectively, reflecting continued investor caution and repricing across the long end of the yield curve.
Outlook:
Equity Market
The Recovery recorded last Friday maybe sustained during the week. Banking should stay comparatively resilient on the back of the ongoing recapitalisation drive. Consumer Goods and Insurance could offer relative safety for investors rotating into more defensive names. Overall direction will likely hinge on stock-specific earnings positioning ahead of H2 results season.
Fixed Income Market
Nigeria’s fixed income market should stay firmly anchored by high yields next week, with the 10-year bond yield already at 18.54%. The newly announced N5.8 trillion NTB issuance programme for Q3, more than four times the prior quarter’s target may lead to an increase in yields. Expect continued oversubscription at auctions given strong appetite for the 364-day Bill. Rates are unlikely to see a policy-driven shift next week, keeping fixed income the more attractive destination for liquidity relative to equities in the near term.