The Nigerian domestic market closed on a positive note, as bargain hunting in FIRSTHOLDCO (+17.7%), ARADEL (+9.6%), BUACEMENT (+6.8%), MTNN (+3.1%) and ZENITHBANK (+2.4%) drove the All-Share Index higher by 2.8% w/w to 249,804.56 points.
September 18, 2026/Cordros Report
Global
The Federal Open Market Committee (FOMC) unanimously voted to raise the federal funds target range by 25bps to 3.75% – 4.00% at its sixth meeting of the year, marking its first hike since July 2023, in line with market expectations. Policymakers noted that inflation remains elevated and that the increase was intended to support a more timely return to the 2.0% target. The Committee also indicated the possibility of another rate hike later in the year, as elevated energy prices continue to reinforce inflationary pressures linked to the Middle East conflict. Most notably, Fed Chair Kevin Warsh emphasised that the Fed’s predominant focus is currently on the price stability side of its dual mandate. He added that economic activity is expanding at a solid pace, domestic spending remains resilient, productivity growth is strong, and capital investment is robust. At the same time, the Chair noted that job gains have remained broadly in line with labour force growth, while the unemployment rate has changed little. In its updated projections, the Fed raised its 2026E real GDP growth rate forecast to 2.3% y/y (Prev.: +2.2% y/y), while increasing its 2026E PCE and core inflation forecasts to 3.7% y/y (Prev.: +3.6% y/y) and 3.4% y/y (Prev.: +3.3% y/y), respectively. The unemployment rate is now projected at 4.1% in both 2026 and 2027, down from 4.3% previously for both years. Meanwhile, the updated dot plot shows that 16 of 18 participants project at least one further 25bps increase by year-end, while four project two additional hikes. Looking ahead, we expect the Fed to maintain a restrictive policy stance as elevated energy prices continue to reinforce inflationary pressures. Unless labour market conditions deteriorate significantly or economic growth slows sharply, we expect the Committee to raise the target range for the federal funds rate by a further 25bps at its 28 October meeting. This view broadly aligns with market pricing, with the CME FedWatch Tool indicating a 53.1% probability of a rate hike at its next meeting.
According to the Office for National Statistics (ONS), UK headline inflation rose to five-month high of 3.1% y/y in August, from 2.9% y/y in July, in line with market expectations. The acceleration was largely driven by higher transport and motor fuel prices, while food and services inflation remained broadly unchanged. More specifically, the ONS reported that average petrol prices rose by 9.1 pence (GBP0.09) per litre between July and August, while diesel prices increased by 14.2 pence (GBP0.14) per litre. Meanwhile, food inflation remained unchanged at +1.3% y/y (July: +1.3% y/y) as slower inflation in sugar, jam, syrups, chocolate and confectionery offset stronger price pressures in some other food categories. Similarly, services inflation, an important indicator of domestically generated price pressures, remained unchanged at 3.4% y/y, as higher transport costs offset lower prices for furniture, household goods and clothing. Core inflation, which excludes energy, food, alcohol and tobacco, was also unchanged at 2.6% y/y in August, suggesting that underlying price pressures remain broadly contained. On a month-on-month basis, consumer prices rose by 0.5% in August (July: +0.3% m/m), primarily reflecting higher energy costs. Looking ahead, we expect UK headline inflation to rise further in the coming months, as elevated global energy prices feed through to motor fuels, household energy bills and other production and transportation costs. Although stable core and services inflation indicates that second-round effects remain limited, a prolonged energy shock could increasingly influence firms’ pricing decisions, wage negotiations and inflation expectations. Accordingly, we expect the Bank of England to maintain a restrictive policy stance in the near term, with the likelihood of a rate hike increasing if energy pressures persist and broaden into underlying inflation.
Global Markets
Global equities traded choppily this week, as investors digested monetary policy decisions from major central banks, while a pullback in oil prices eased the prior week’s inflation concerns. Brent crude retreated toward USD107.00/bbl after Saudi Arabia moved to restore crude flows through the Strait of Hormuz. At the time of writing, major US indices (DJIA: -1.5%; S&P 500: -0.3%; NASDAQ: +0.3%) were mixed, as the DJIA and S&P 500 were weighed down by losses in financials on expectations of further rate hikes, while the NASDAQ edged higher on a rebound in technology names as Treasury yields retreated. Meanwhile, European equities (STOXX Europe 600: +0.5%; FTSE 100: +1.6%) advanced, supported by the pullback in oil prices, with the FTSE 100 further buoyed by the Bank of England’s decision to hold rates. Elsewhere, Asian markets (SSE: +0.6%; Nikkei 225: +1.9%) advanced, as Japanese equities were buoyed by lower oil prices and sustained bargain-hunting in technology tickers, while Chinese equities gained on continued PBoC liquidity support. Finally, the Emerging Market (MSCI EM: -2.0%) index declined on losses in Brazil (-1.2%), while the Frontier Market (MSCI FM: -1.5%) index declined on losses in Morocco (-4.4%) and Romania (-3.5%).
Domestic Economy
According to the National Bureau of Statistics (NBS), headline inflation eased for the third consecutive month, moderating by 4bps to 15.39% y/y in August (July: 15.43% y/y), driven by a broad reduction in food and core inflation. Specifically, the food index eased by 74bps to 19.57% y/y (July: 20.31% y/y), primarily reflecting the commencement of the harvest season, which reversed some of the price pressures associated with the lean season over the past two months. Within the food basket, prices of farm produce and imported food moderated. At the same time, core inflation moderated sharply by 168bps to 13.29% y/y (July: 14.97% y/y), reflecting softer price pressures in food and non-alcoholic beverages, transport and health sub-components. On a month-on-month basis, headline inflation slowed to 0.71% in August (July: 1.57% m/m), its lowest reading since November 2025. This moderation reflects seasonal improvements in food supply and naira appreciation, with the average exchange rate strengthened by 2.1% m/m to NGN1,325.77/USD despite volatility in energy prices during the month. Looking ahead, we expect inflation to rise moderately in September, as renewed fuel price pressures could partly offset the disinflationary impact of the main harvest season and continued naira appreciation. Food inflation should remain relatively contained as increased supplies of grains, tubers, and vegetables improve market availability. However, insecurity and elevated distribution costs could limit the extent of the moderation in food price pressures. Accordingly, we expect inflation to rise to 0.73% m/m in September (August: +0.71% m/m), while the annual inflation rate is expected to increase marginally to 15.40% y/y (August: 15.39% y/y).
Based on the data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil production, including condensates, increased 0.4% m/m to 1.68 mb/d in August (July: 1.67 mb/d). The improved performance was driven by a rebound in production at the Akpo (+38.2% m/m) and Erha (+45.1% m/m) terminals, following operational challenges that weighed on output in the prior month. We also note stronger output at the Qua Iboe (+8.7% m/m), Bonny (+5.3% m/m), Odudu (+0.4%m/m), Tulja-Okwuibome (+0.4% m/m) and Escravos (+0.2% m/m) terminals. Meanwhile, production declined at the Brass (-12.3% m/m), Nembe (-8.8% m/m), Anyala Madu (-8.1% m/m), Bonga (-7.7% m/m), and Agbami (-0.1% m/m) terminals. In the near term, we expect oil output to trend higher, underpinned by increased upstream investment, improving security conditions, and the start up of new fields and evacuation infrastructure. Nevertheless, recurring terminal disruptions, particularly those linked to infrastructure limitations, could constrain production gains. On balance, we revise our 2026E average crude oil production forecast to 1.66 mb/d (Previously: 1.70 mb/d).
Capital Markets
Equities
The Nigerian domestic market closed on a positive note, as bargain hunting in FIRSTHOLDCO (+17.7%), ARADEL (+9.6%), BUACEMENT (+6.8%), MTNN (+3.1%) and ZENITHBANK (+2.4%) drove the All-Share Index higher by 2.8% w/w to 249,804.56 points, lifting the month-to-date and year-to-date returns to +2.3% and +60.5%, respectively. On market activity, trading volume declined by 25.8% w/w, while total trading value increased by 7.7% w/w. Sectoral performance was broadly positive, as the Banking (+4.4%), Insurance (+3.8%), Oil & Gas (+3.7%), Industrial Goods (+3.1%) and Consumer Goods (+0.5%) indices all closed higher for the week.
In the coming week, market direction will likely be shaped by (1) the outcome of the 307th MPC meeting scheduled for 21 and 22 September, (2) developments in the primary market auctions, and (3) the reinclusion of Nigerian equities in the FTSE Index, effective 21 September 2026. Nonetheless, we expect risk-off sentiment to remain broadly dominant, albeit with intermittent bargain hunting, as investors assess these catalysts and reposition ahead of Q4.
Money Market and Fixed Income
Money Market
The OVN rate expanded by 9bps w/w to 22.2%, as OMO (NGN2.52 trillion) and FGN Bond (NGN748.64 billion) PMA debits offset inflows from OMO maturities (NGN3.05 trillion). Meanwhile, average system liquidity rose to a net long position of NGN3.27 trillion, from NGN3.16 trillion in the previous week, as mid-week OMO maturities boosted liquidity before the CBN’s OMO auction subsequently drained some of the excess.
Barring any significant CBN intervention, system liquidity should remain supportive next week, underpinned by NGN3.36 trillion in OMO maturities. However, fresh OMO issuances could absorb part of the liquidity surplus, keeping money market rates broadly around current levels.
Treasury Bills
The Treasury bills secondary market traded on a bullish note, as unmet bids from the week’s OMO auction spilled into the secondary market, with sentiment further supported by strong local demand. As a result, the average yield across all instruments contracted by 5bps to 19.1%. By segment, average NTB secondary market yields closed flat as investors maintained a cautious stance ahead of next week’s NTB PMA. Similarly, average OMO secondary market yields contracted 16bps to 20.2%, as unmet bids at the week’s OMO PMA filtered into the secondary market. At the OMO PMA on Wednesday, the CBN offered NGN1.00 trillion in bills, attracting NGN3.03 trillion in demand, and ultimately allotting NGN2.52 trillion. Stop rates settled at 19.25%, 19.05% and 18.39% for the 69-, 90- and 153-day tenors, respectively.
We expect the Treasury bills secondary market to retain a broadly bullish bias, supported by resilient domestic demand and ample system liquidity. Additionally, the DMO is scheduled to offer NGN500.00 billion in Treasury bills at Wednesday’s (23 September) NTB PMA.
Bonds
The FGN bond secondary market traded on a bullish note, with average yields across instruments contracting by 11bps to 16.6%, as unmet demand from the week’s bond PMA spilled into the secondary market. Sentiment was further supported by JP Morgan’s inclusion of Nigeria as a constituent of its flagship GBI-EM Edge (Frontier Market) local-currency bond index, which provided an additional source of demand for domestic bonds. Across the benchmark curve, the average yield expanded at the short (+12bps) and mid (+3bps) segments due to sell pressure on the MAR-2027 (+30bps) and JUN-2033 (+23bps) bonds, respectively while it contracted at the long (-63bps) end due to demand for the APR-2049 (-193bps) bonds. At Monday’s bond PMA, the DMO reopened the JUN-2038 bond and newly issued the SEP-2036 bond, offering a total of NGN1.00 trillion. Total demand settled at NGN1.49 trillion, with the DMO eventually allotting NGN748.64 billion. The stop rates on the JUN 2038 bonds, which was on-the-run at the previous auction, contracted by 94bps to 16.85%, while the newly issued SEP-2036 settled at 16.79%.
In the near term, we expect resilient local demand, improving offshore participation and the September MPC meeting outcome to sustain the bullish tone. Nigeria’s inclusion in J.P. Morgan’s GBI-EM Edge Index should support sustained foreign demand for local-currency bonds and further yield compression, albeit at a measured pace. Over the medium term, however, sizeable government borrowing requirements should keep yields relatively elevated, with the longer-term trajectory dependent on the balance between foreign inflows, domestic liquidity and the FGN’s funding needs.
Foreign Exchange
The naira depreciated 0.4% w/w to NGN1,332.14/USD, as domestic demand offset inflows from the week’s OMO auction. Meanwhile, gross external reserves increased by USD207.49 million to USD54.69 billion (17 September 2026). In the forwards market, the naira depreciated across the 1-month (-0.2% to NGN1,351.86/USD), 3-month (-0.2% to NGN1,388.73/USD), 6-month (-0.1% to NGN1,441.06/USD), and 1-year (-0.1% to NGN1,544.95/USD) contracts.
We expect the naira to remain broadly stable around its current level in the near term, supported by resilient portfolio inflows, relatively firm investor sentiment and a widening current account surplus.