August 3, 2026/United Capital Update
Global Markets
United States
The Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) maintained the Federal Funds Rate at 3.50%–3.75% in July, marking a fifth consecutive meeting without a policy change. The Fed cited solid economic growth, strong productivity, resilient labour market conditions and robust capital investment. At 3.5%, Inflation rate remained above the Fed’s 2% target making a rate cut a difficult decision. Three FOMC members supported a 0.25% rate hike instead, signalling that further monetary policy tightening remains possible if inflationary pressure persist.
Euro Area
The Euro Area economy grew 1.0% year-on-year in Q2 2026, accelerating from 0.5% in Q1 and exceeding market expectations of 0.5%. Growth was supported by AI-related investment and resilient government spending, despite higher energy prices and the economic impact of the Iran conflict. Spain remained the fastest-growing major economy with 2.7% annual growth, followed by the Netherlands, Italy, Germany and France, reflecting broad-based regional expansion. On a quarterly basis, the economy expanded 0.4%, marking its strongest growth since Q1 2025 and exceeding market expectations of a 0.2% increase.
Asia
Bank of Japan (BoJ) maintained its short-term policy rate at 1.0% in July, keeping borrowing costs at their highest level since September 1995. BoJ cited balanced risks to economic activity, while highlighting the need to monitor global AI-related demand, yen movements and underlying inflationary pressures. The central bank lowered its FY2026 inflation forecast to 2.5% from 2.8%, reflecting government measures to reduce household energy costs. Current inflation rate as at June is 1.7%, meanwhile, BoJ raised its FY2026 GDP growth forecast to 0.6% from 0.5%, supported by resilient domestic demand and continued policy support. It also increased its FY2027 inflation forecast to 2.4% and revised its FY2027 GDP growth projection upward to 0.8%, signalling confidence in the medium-term outlook.
Oil Markets
Crude oil prices declined during the week as easing geopolitical risk concerns and expectations of adequate global supply weighed on market sentiment. Brent crude fell 7.83% week-on-week to US$86.88/b as of 30 July, while Bonny Light declined 8.10% to US$94.42/b as of 27 July. Despite the pullback, prices remained supported by ongoing supply risks and continued geopolitical uncertainty.
Outlook
Global markets may remain bullish this week as investors continue to access the Fed’s hold decision and the ongoing peace talk between the US and Iran. Market sentiment will likely remain driven by expectations of declining global yield in the short term. Gold prices may appreciate on expectation of drop in yield. Oil prices are expected to remain supported by supply concerns and geopolitical developments, with commodity price movements continuing to influence global inflation expectations.
Domestic Economy
Nigeria’s broad money supply (M3) increased to ₦133.25tn in June from ₦129.21tn in May, recording a ₦4.04tn month-on-month increase despite tight monetary policy. The increase was driven primarily by growth in net domestic assets and quasi-money, reflecting continued liquidity expansion across the financial system. Private sector credit rose to ₦83.26tn from ₦81.04tn, indicating sustained lending to businesses despite elevated interest rates and restrictive monetary conditions. Meanwhile, currency outside banks declined, suggesting increased financial intermediation and stronger adoption of formal banking channels.
Equity Market
The Nigerian Exchange All Share Index (NGX-ASI) closed the week on a negative note, with the NGX All-Share Index (NGX-ASI) declining 0.84% week-on-week to 245,283.68 points. Consequently, the year-to-date return moderated to 57.62%. Sectoral performance was mixed, as the Insurance Index advanced 1.72%. However, the Consumer Goods, Banking, Industrial Goods and Oil & Gas indices declined 2.29%, 0.69%, 0.20% and 0.24%, respectively, reflecting profit-taking across key sectors.
Fixed Income and Money Market
The fixed income market traded with a bullish bias during the week, as Nigerian Treasury Bill (NTB) and bond yields declined across most tenors amid stable liquidity conditions. Across the NTB market, the 91-day, 182-day and 364-day yields declined by 0.17%, 0.31% and 0.30% to 16.69%, 17.91% and 20.41%, respectively. Similarly, Bond yields declined across all tenors, with the 3-year, 5-year, 7-year and 10-year yields falling by 0.18%, 0.34%, 0.32% and 0.44% to 17.43%, 17.39%, 17.40% and 17.39%, respectively. Meanwhile, the Overnight (O/N) rate increased by 0.14% to 22.35%, while the Open Repo Rate (OPR) remained unchanged at 22.00%.
Outlook:
Equity Market
Investors should position ahead of additional H1 2026 earnings releases, particularly in banking and financial services, where strong results could support further interim dividend announcements. Profit-taking may persist in outperforming stocks, creating selective buying opportunities, while earnings and dividend expectations are likely to remain the primary drivers of market sentiment in the near term.
Fixed Income Market
Nigeria’s fixed income market is expected to remain relatively quiet this week, with no scheduled NTB or Bond auctions. Secondary market yields should remain broadly stable, supported by ample system liquidity and sustained institutional demand. Investors will also monitor positioning ahead of the Debt Management Office’s next bond auction.