September 7, 2026/United Capital Update
Global Markets
United States
The S&P Global US Composite Purchasing Managers’ Index (PMI) rose to 56.0 points in August 2026, from 54.5 points in July 2026. This marked the third consecutive month of faster private-sector growth and the strongest expansion in over four years. Stronger services activity, new orders and employment gains indicate that underlying demand remains resilient. Stronger activity should support economic growth and corporate earnings. However, persistent demand could keep inflationary pressures elevated. This may limit the US Federal Reserve’s (Fed) room to ease policy in the near term, particularly following its cautious stance at the Jackson Hole Symposium. For emerging markets such as Nigeria, higher US rates could limit foreign capital inflows and keep pressure on local currencies.
Euro Area
Euro Area annual inflation accelerated to 3.3% in August 2026, from 2.9% in July 2026. This marked its highest level since September 2023, driven mainly by higher energy costs, alongside firmer food and goods prices. The reading matched market expectations but remained above the European Central Bank (ECB)’s 2.0% target. Higher energy costs could weigh on household purchasing power and corporate margins, potentially slowing economic activity. The supply-driven nature of the inflation increase also makes further ECB tightening less straightforward, particularly amid continued growth concerns.
Asia
Japan’s S&P Global Composite PMI rose to 53.5 points in August 2026, from 52.7 points in July 2026. This marked the 17th consecutive month of private-sector expansion and the strongest growth since February 2026. Stronger manufacturing output, new orders and employment point to improving domestic demand. The stronger activity should support corporate earnings and reinforce Japan’s economic recovery, while persistent price pressures could encourage further Bank of Japan (BoJ) policy normalisation. However, higher oil prices remain a risk to household purchasing power and corporate profitability.
Oil Markets
Crude oil prices rose during the week, with Brent crude rising by 7.94% to US$95.52/b as at September 04. This was driven by renewed Middle East supply concerns, continued disruptions to Strait of Hormuz shipping routes, and tightening global oil inventories. Bonny Light also rose 4.46% week-on-week to US$102.54/b, supported by the broader increase in global crude prices amid persistent geopolitical risks and constrained supply conditions.
Outlook
This week, global markets are likely to trade cautiously as investors reassess the outlook for US monetary policy following the stronger-than-expected August jobs report. The data could reinforce expectations of a less accommodative Fed, keeping US yields and the Dollar supported. Equities may remain volatile as investors weigh stronger economic activity against tighter financial conditions. Gold could face further pressure from a firmer Dollar and higher yields, while the Euro and Yen may remain under pressure amid wider policy divergence.
Domestic Economy
Nigeria’s Composite Purchasing Managers’ Index (PMI) remained above the 50-point threshold, rising to 52.7 points in August 2026 from 51.1 points in July 2026. This marked the third consecutive month of expansion, supported by stronger activity in the Services sector. Notably, the Industry PMI returned to expansion, rising to 50.6 points from 49.6 points in July. As a leading indicator of economic activity, the sustained expansion points to a firmer near-term growth outlook. For financial markets, stronger economic activity should support corporate earnings and investor sentiment.
Equity Market
The Nigerian equities market closed the week on a positive note, with the NGX All-Share Index (NGX-ASI) rising by 2.36% week-on-week to 246,992.44 points. Consequently, the year-to-date return improved to 58.72%. The gain was supported by renewed buying interest, particularly in the Oil & Gas, Insurance, Banking sectors and Consumer Goods sectors.
Fixed Income and Money Market
The fixed income market traded mixed during the week, with Nigerian Treasury Bill (NTB) yields falling across the short and longer tenors, while bond yields rose across most tenors. In the NTB market, the 91- and 364-day yields declined by 0.39% and 0.52% to 17.79% and 20.02%, respectively. Meanwhile the 182-day yield rose by 0.28%. This suggests investor demand remains strong for shorter- and longer-tenor bills. Meanwhile, the rise in the 182-day yield points to some caution around medium-term duration amid changing liquidity conditions. Bond yields were largely higher, with the 3-year and 5-year yields rising by 0.08% and 0.05%, respectively. The 7-year bond yield fell marginally to settle at 17.05% while the 10-year bond yield stayed flat. In the interbank market, the Overnight (O/N) rate rose by 0.13% to settle at 22.20%, while the Open Repo Rate (OPR) remained unchanged at 22.00%.
Outlook:
Equity Market
The Nigerian equity market could maintain its upward trend this week as investors position ahead of FTSE Russell’s September 21, 2026 Frontier Market inclusion. Large-cap stocks, particularly MTN Nigeria, Dangote Cement and tier-one banks, could attract increased demand ahead of the reclassification. Stocks with strong earnings, attractive valuations and consistent dividend payouts should also remain in focus.
Fixed Income Market
The Nigerian fixed income market should remain active this week, with NTB yields likely to trade around current levels following the recent auction. Demand should remain strongest for longer-dated bills as investors seek to lock in attractive yields. FGN bond yields are likely to remain broadly stable, with the Debt Management Office (DMO) issuance and system liquidity shaping market direction. Further moderation in inflation could support gradual yield compression over the medium term. Open Market Operation (OMO) bills should remain important for liquidity management, while investors continue to balance attractive yields against expectations for eventual monetary easing. Overall, demand for government securities should remain firm, supported by ample liquidity and improving investor sentiment.