July 20, 2026/United Capital Update
Global Markets
United States
US headline inflation eased to 3.5% y/y in June 2026 from 4.2% in May, marking its first decline in five months. The reading was below the 3.8% consensus forecast, reflecting slower energy price growth following the US-Iran ceasefire and softer shelter, food, and core inflation. On a monthly basis, CPI fell by 0.4%, the largest decline since April 2020, driven by a 5.7% drop in energy prices. Annual core inflation also slowed to 2.6% from 2.9%, while monthly core CPI remained unchanged.
Euro Area
Euro Area industrial production declined 1.2% y/y in May 2026, reversing April’s 0.3% increase as weaker consumer goods output outweighed gains in capital and energy goods. The Euro Area recorded a €7.8bn trade deficit in May, compared with a €15.0bn surplus a year earlier and worse than market expectations. The deterioration reflected a 10.0% rise in imports, a wider energy deficit, lower machinery and chemicals surpluses, and weaker exports to the US, China, and Turkey.
Asia
China’s economy grew by 4.3% y/y in Q2 2026, slowing from 5.0% in Q1 and missing the 4.5% market forecast. The slowdown reflected weak domestic demand, subdued private investment, and a prolonged property downturn, despite resilient AI-related exports. The reading fell below Beijing’s 4.5%–5.0% annual growth target, reinforcing expectations of additional policy support. The National Bureau of Statistics cited elevated external uncertainties and persistent imbalances between strong supply and weak demand. China’s economy expanded 4.7% in H1 2026, supported by high-tech manufacturing, equipment production, and resilient services activity.
Oil Markets
Crude oil prices gained during the week as geopolitical tensions and supply concerns supported Brent crude prices. Brent crude rose by 10.39% w/w to US$84.23/bbl, while Bonny Light also gained by 11.61% to US$84.50/b. The gains reflected heightened geopolitical risks and concerns over potential supply disruptions. However, expectations of higher OPEC+ production continued to limit further upside in oil prices.
Outlook
Global markets will mixed this week as investors assess central bank decisions alongside evolving political developments. The European Central Bank meets Thursday, July 23, 2026 and is expected to hold policy rate constant stance as elevated crude oil prices sustain inflation risks. The Bank of Japan is expected to keep rates at 1.0% on Thursday, with markets pricing the next hike in December. UK assets should remain sensitive to political developments as Andy Burnham prepares to enter Downing Street after winning Labour’s leadership vote. US flash Purchasing Managers’ Index readings on Friday are expected to ease modestly from June’s multi-month high. Market volatility may remain elevated after the Chicago Board Options Exchange Volatility Index (VIX) rose to 16.72 last week, while China’s Loan Prime Rate decision could influence risk sentiment.
Domestic Economy
Nigeria’s headline inflation eased marginally to 15.91% in June 2026 from 15.93% in May, marking its first decline after three consecutive monthly increases. The inflation rate is lower than the 25.29% recorded in June 2025. However, food price pressures persisted due to an increase in staple food items prices. United Capital Research had earlier released a forecast of 15.95% for June 2026 inflation.
Equity Market
The Nigerian equities market closed the week on a negative note, with the NGX All-Share Index (NGX-ASI) declining by 0.14% week-on-week to 243,462.13 points. Consequently, the year-to-date return moderated to 56.45%. Sectoral performance was mixed, as the Banking and Insurance indices gained 9.30% and 0.25%, respectively. However, the Industrial Goods, Oil & Gas, and Consumer Goods indices declined by 6.26%, 0.79%, and 0.15%, respectively. Overall, profit-taking in large-cap industrial stocks outweighed buying interest in banking stocks, resulting in the market’s weekly decline.
Fixed Income and Money Market
The fixed income market traded mixed during the week, with Treasury Bill and bond yields showing mixed movements despite stable liquidity conditions. Across the Nigerian Treasury Bill market, the 91-day yield declined by 0.23% to 16.46%, while the 182-day and 364-day yields rose by 0.26% and 0.16% to 18.27% and 20.90%, respectively. Similarly, the bond market closed mixed, as the 3-year and 7-year yields declined by 0.07% and 0.02% to 17.86% and 18.19%, respectively. Meanwhile, the 5-year and 10-year bond yields increased by 0.03% and 0.08% to 18.03% and 18.35%, respectively. The Overnight (O/N) rate rose by 0.05% to 22.25%, while the Open Repo Rate (OPR) remained unchanged at 22.00%.
Outlook:
Equity Market
The release of half year results should stimulate activity in the market. The All-Share Index should remain above 242,000 points, although profit-taking may follow gains that lifted year-to-date returns above 56%. Telecom, Banking and industrial stocks are expected to drive overall market performance. Investors are likely to buy on price dips, supported by positive market sentiment and the ongoing second-half rally. Oil and gas, alongside consumer goods stocks, should remain in focus following strong gains recorded earlier this month.
Fixed Income Market
All eyes will be on the outcome of the Monetary Policy Committee (MPC) meeting on July 20 and 21. The Monetary Policy Rate is expected to remain at 26.50%, as inflation remains too high to support an early rate cut. Nigerian Treasury Bill yields should remain elevated, with 91-day, 182-day, and 364-day yields staying near current levels. Investors should continue favouring long-term Bills as yields are currently around peak levels. Federal Government of Nigeria bond yields should remain broadly stable, with limited room for a significant decline before the fourth quarter. Foreign investor demand should continue supporting the bond market after strong inflows during the first quarter of 2026.