September 28, 2026/United Capital Report
Global Markets
United States
US services activity strengthened in September 2026, with the S&P Global Services Purchasing Managers’ Index (PMI) rising to 58.7 points from 56.5 points in August 2026. This is its strongest expansion in over five years. The increase was driven by stronger domestic consumer demand, which lifted new orders and employment. Export orders, however weakened amid unpredictable tariff policies. Higher demand also increased work backlogs, while the US-Iran tensions pushed fuel and transport costs higher, lifting input cost inflation and output charges. Strong services expansion supports near-term economic growth, but rising costs and weaker business confidence could weigh on activity ahead.
Euro Area
Euro Area business activity accelerated in September 2026, with the Composite PMI rising to 53.1 points from 52.0 points in August 2026. This is its fastest expansion in nearly three-and-a-half years. Growth strengthened across manufacturing and services, supported by stronger new orders. Meanwhile, Germany expanded at its fastest pace in almost a year and France returned to growth. Employment also increased modestly, while higher input costs and output prices pointed to renewed inflationary pressures. Stronger business activity supports near-term growth, but rising inflation and subdued business confidence could constrain the recovery.
Asia
Japan’s Composite PMI eased to 52.5 points in September from 53.5 points in August 2026. This marks its weakest reading since May as factory output and services growth slowed. Total new orders also weakened, despite strong export demand, while employment growth accelerated and backlogs reached a seven-month high. Input cost inflation eased but remained elevated due to higher energy and raw material costs, the weaker Yen, and rising labour and transport expenses. Slower activity and persistent cost pressures may weigh on near-term growth, although stronger business sentiment around AI, semiconductors, defence and automobiles provides support.
Oil Markets
Brent crude oil prices rose by 1.70% week-on-week to close at US$106.60/b, driven by persistent concerns over global oil supply disruptions. Market sentiment remained influenced by constrained flows through the Strait of Hormuz, continued security risks in key producing regions, and fears of tighter crude availability.
Outlook
This week, global markets may trade cautiously, assessing whether recent data confirms resilient economic growth following major central bank decisions. Incoming US data will be important for gauging the Fed’s policy path and whether rates remain higher for longer. Oil prices may remain elevated and volatile, with Brent trading near $105–107/barrel following Houthi missile strikes on Saudi cities. The strikes have renewed concerns over Gulf shipping and the Strait of Hormuz, while reported progress in US-Iran talks could limit further gains.
Domestic Economy
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) reduced its Monetary Policy Rate (MPR) by 3.50% to 23.0% in September 2026 from 26.5%. It also adjusted the facilities corridor around the MPR to +0.5%/-3.0%. This is its largest reduction since 2007, after holding rates in May and July 2026. The move aims to improve monetary policy transmission as market rates increasingly diverged from the benchmark rate. The MPC noted that easing inflation and stable macroeconomic conditions provided room for the adjustment without disrupting the disinflation process. Annual inflation eased to 15.39% in August 2026 from 15.43% in July 2026, marking the third consecutive monthly decline. Governor Olayemi Cardoso expects inflation to moderate further, supported by previous tightening, exchange-rate stability and improved food supply. The rate reduction signals greater support for economic growth. Meanwhile, lower funding costs could support equities.
Equity Market
The Nigerian equities market closed the week on a positive note, with the NGX All-Share Index (NGX-ASI) rising 0.92% week-on-week to 252,113.41 points. Consequently, the market’s year-to-date return increased to 62.01%, extending its strong annual performance. The gain was supported by renewed buying interest across four out of the five sectors under our coverage, indicating broad-based investor participation during the week.
Fixed Income and Money Market
The fixed-income market traded broadly bullish during the week, with both Treasury Bill and FGN Bond yields falling across tenors. In the Nigerian Treasury Bill (NTB) market, the 91-day, 182-day and 364-day yields fell by 0.06%, 1.28% and 1.26% to 18.05%, 17.95% and 18.52%, respectively. This suggests that expectations of monetary policy easing are already feeding into the market, with investors accepting lower yields amid declining inflation and the CBN’s rate reduction. In the bond market, yields also fell across all tenors. In the interbank market, both the Overnight (O/N) rate and Open Repo Rate (OPR) fell sharply by 1.32% and 1.20% to 20.98% and 20.80%. This signals easing liquidity conditions and lower short-term funding costs following the CBN’s policy rate reset, which could support further declines in fixed-income yields.
Outlook:
Equity Market
The Nigerian equity market should remain strong as investors adjust to the CBN’s 3.50% MPR reset to 23%. Lower interest rates could encourage some investors to rotate from fixed income into equities, supporting banking, consumer and other interest-sensitive stocks. The ₦2.15tn Dangote Refinery IPO should remain a major liquidity event ahead of its October 13 closing. Nigeria’s FTSE Russell Frontier Market reclassification should also support foreign investor attention, while elevated crude prices could benefit oil and gas stocks. However, market gains could moderate if investors lock in profits following the recent rally. Trading will also be shortened by Thursday’s Independence Day holiday.
Fixed Income Market
Nigeria’s fixed-income market should remain bullish following the CBN’s 3.50% MPR reset and revised Standing Facilities Corridor. Treasury Bill yields could decline further as investors adjust to the lower policy rate and stronger expectations for monetary easing. FGN Bond yields could also trend lower, supported by strong liquidity and increased demand for longer-dated securities. Nigeria’s 7.4% weighting in the JP Morgan GBI-EM Edge Index should provide additional structural support for local bonds. However, continued Open Market Operations (OMO) issuance could compete for liquidity if offered at relatively attractive yields.