August 17, 2026/United Capital Report
Global Markets
United States
The United States inflation eased for a second consecutive month to 3.4% y/y in July 2026, from 3.5% in June, in line with expectations. The moderation reflected lower energy price pressures, while shelter inflation eased to 3.2% from 3.3%. Gasoline inflation slowed to 24.6% from 26.7%, while fuel oil inflation declined to 39.1% from 42.9%. Meanwhile, food inflation remained unchanged at 3.0%. On a monthly basis, the Consumer Price Index (CPI) rose 0.1%, following a 0.4% decline in June, driven mainly by higher shelter costs. Core inflation also eased to 2.5% y/y from 2.6%, despite rising 0.2% m/m.
Euro Area
Euro Area industrial production increased 0.1% y/y in June 2026, reversing a 0.1% y/y decline in May and outperforming expectations for a 0.8% contraction. On a monthly basis, industrial production was unchanged in June, following a 0.3% increase in May, indicating that industrial activity lost momentum despite the annual improvement. The stronger-than-expected performance points to resilience in the industrial sector despite persistent economic pressures. The result also suggests that manufacturing activity remained broadly stable, supporting the region’s modest growth outlook.
Asia
Japan’s Producer Price Index (PPI) increased 7.2% y/y in July 2026, easing from a revised 7.3% in June and slightly below the 7.4% market expectation. The moderation suggests some easing in commodity and energy cost pressures, although producer inflation remained elevated. Price growth slowed across petroleum and coal products, chemicals and food, while prices for transport and production machinery increased. On a monthly basis, producer prices rose 0.1%, down sharply from 0.5% in June, marking the weakest monthly increase in five months. However, import prices remained elevated, with the yen-based import price index rising 29.1% y/y, highlighting continued pressure from higher import costs and the weaker Yen.
Oil Markets
Crude oil prices increased during the week, supported by supply concerns and persistent geopolitical risks. Brent crude rose 5.55% week-on-week to US$87.07/b, while Bonny Light increased 6.67% to US$96.47/b. Despite the weekly gains, oil prices remained sensitive to developments around global supply and geopolitical tensions.
Outlook
Global markets should remain positive this week, with the Federal Reserve’s July meeting minutes offering further clues on future policy direction. US retail earnings from Home Depot, Target, Walmart and Lowe’s should provide insight into consumer spending. China’s economic data should attract attention following weaker services activity, while the Yen remains sensitive to Bank of Japan policy expectations. UK inflation and labour market data should shape expectations for the Bank of England’s next decision. Investors should monitor Middle East developments and Friday’s preliminary Purchasing Managers’ Index readings for further market direction.
Domestic Economy
Nigeria’s Composite Purchasing Managers’ Index (PMI) rose to 51.1 points in July 2026, from 50.1 points in June, marking a second consecutive month of private-sector expansion. The improvement was driven mainly by a rebound in services and sustained agricultural activity. Services PMI rose to 51.1 points from 49.4 points, returning to expansion after three consecutive months of contraction. Agriculture PMI remained unchanged at 52.1 points, extending its expansion streak to 24 months. However, Industry PMI remained in contraction at 49.6 points in July 2026, despite a slight improvement from 49.5 points in June. Overall, the data point to a gradual recovery in private-sector activity, although industrial weakness continues to limit the breadth of the expansion.
Equity Market
The Nigerian equities market closed the week on a negative note, with the NGX All-Share Index (NGX-ASI) declining 1.20% week-on-week to 242,619.20 points. Consequently, the year-to-date return moderated to 55.91%. Sectoral performance was broadly negative, with the Banking, Insurance, Consumer Goods, Industrial Goods and Oil & Gas indices declining 1.48%, 2.72%, 6.72%, 1.22% and 0.06%, respectively.
Fixed Income and Money Market
The fixed income market traded mixed during the week, with NTB and bond yields moving higher across most tenors. In the NTB market, the 91-day and 364-day yields increased by 0.16% and 0.01% to 17.26% and 20.31%, respectively. Meanwhile, the 182-day yield declined by 0.31% to 18.15%. Bond yields increased across all tenors, with the 3-year, 5-year, 7-year and 10-year yields rising by 0.02%, 0.11%, 0.27% and 0.12% to 17.03%, 17.23%, 17.38% and 17.33%, respectively. Meanwhile, the Overnight (O/N) rate edged up by 0.01% to 22.11%, while the Open Repo Rate (OPR) remained unchanged at 22.00%.
Outlook:
Equity Market
Income-focused investors should monitor fresh interim dividend announcements this week, following recent declarations from MTN Nigeria, Presco, HBM Nigeria and Seplat Energy. HBM Nigeria offers the highest yield among recent payouts, followed by MTN Nigeria and Seplat Energy. Investors should consider reinvesting dividend proceeds carefully, given elevated Naira Treasury Bill yields that offer an attractive alternative.
Fixed Income Market
Fixed income investors should monitor OMO Bill activity closely, following its contribution of over 70% of trading value last week. Yields are expected to remain elevated, with OMO bills closing near 22.67% and shorter-dated Treasury Bills around 20.25%. The FGN Bond curve is expected to remain within recent ranges, with yields spanning approximately 14.85% to above 17% across tenors. Liquidity conditions are likely to remain tight, making money market funding costs an important consideration for fixed income investors. Investors should also monitor the DMO’s auction calendar for new Treasury Bill and bond issuance announcements. Demand for longer-dated securities should remain firm, supported by institutional investors’ continued search for attractive yields.