The domestic stock market closed lower for the third consecutive week, as losses in ZENITHBANK (-6.5%), MTNN (-1.8%), FIRSTHOLDCO (-3.9%) and GTCO (-4.4%) dragged the All-Share Index by 0.3% w/w to 247,539.73 points.
October 16, 2026/Cordros Report
Global
According to the Bureau of Labor Statistics (BLS), US headline inflation rose by 30bps +3.7% y/y in September (August: +3.4% y/y) and above market expectations of +3.6% y/y. The uptick largely reflected rising energy prices linked to the ongoing Middle East conflict, which more than offset the moderation in food inflation. More specifically, the energy index rose by 20.4% y/y (August: +16.3% y/y), reflecting higher gasoline (+34.2% y/y vs August: +27.4% y/y) and fuel oil (+74.2% y/y vs August: +52.0% y/y) prices. However, food inflation extended its downward trend, moderating to +2.5% y/y in September (August: +2.7% y/y), reflecting slower price increases for food at home (+1.8% y/y vs August: +2.2% y/y), which offset higher prices for food away from home (+3.5% y/y vs August: +3.4% y/y). Elsewhere, core inflation (excluding food and energy) accelerated by 20bps to 2.6% y/y (August: +2.4% y/y), driven by faster price increases in shelter and education & communication. On a month-on-month basis, consumer prices rose by 0.6% in September (August: +0.4% y/y), primarily driven by higher gasoline prices. Looking ahead, inflation risks remain tilted to the upside, as the ongoing Middle East conflict could sustain elevated energy prices, while higher transportation could spill over into food and other consumer prices. Lingering tariff pressures and firmer services inflation could also slow progress towards price stability. Against this backdrop, we expect the Fed to maintain a hawkish bias while keeping rates unchanged at its October 28 meeting to assess incoming data and the effects of its recent tightening. This view broadly aligns with market pricing, with the CME FedWatch Tool indicating an 85.1% probability of a HOLD at its 28 October meeting.
Recent data from China’s National Bureau of Statistics showed consumer price growth rose to 0.9% y/y in September (August: +0.8% y/y), slightly below market expectations of 1.0% y/y. The uptick primarily reflected higher non-food inflation, which outweighed a deeper decline in food prices. Specifically, non-food inflation accelerated to 1.5% y/y (August: +1.2% y/y), as transport and communication costs rose by 4.3% y/y (August: +2.5% y/y), amid higher gasoline prices and stronger travel demand ahead of the Golden Week holiday. In contrast, food prices fell for the sixth consecutive month, declining by 1.7% y/y (August: -1.4% y/y), reflecting lower pork and fresh vegetable prices. Meanwhile, services inflation held steady at 0.8% y/y, while core inflation, which excludes food and energy, remained unchanged at 1.0% y/y. On a month-on-month basis, consumer prices rose by 0.2%, down from August’s six-month high of +0.4% m/m. Looking ahead, we expect consumer inflation to remain modest, as weak household demand and ample food supply continue to constrain price increases. However, elevated oil prices linked to the Middle East conflict could sustain fuel and transportation cost pressures. While higher input costs pose an upside risk, subdued demand should limit pass-through to consumers.
Global Markets
Global equities lacked clear direction this week, as resilient corporate earnings and a rotation into non-technology sectors were tempered by a selloff in semiconductor and AI-linked names. At the time of writing, major US indices (DJIA: +0.9%; S&P 500: +1.2%; NASDAQ: +0.6%) were poised to close the week higher, led by a rotation into financials on the back of stronger-than-expected Q3-26 earnings from major banks, including Wells Fargo and Morgan Stanley. Meanwhile, European equities were mixed, as the FTSE 100 (+0.9%) advanced on strength in banking and energy names, while the STOXX Europe 600 (0.0%) closed flat, as healthcare gains offset weakness in chip stocks. In Asia, Japanese equities (Nikkei 225: +1.1%) advanced holding early-week gains before paring on the chip selloff, while Chinese equities (SSE: -0.7%) declined on losses in semiconductor names. Finally, the Emerging Market (MSCI EM: 0.0%) index closed flat, as gains in India (+3.0%) offset a steep selloff in South Korea (-14.5%), while the Frontier Market (MSCI FM: +0.3%) index edged higher on gains in Romania (+3.0%).
Domestic Economy
According to the National Bureau of Statistics (NBS), headline inflation eased for the fourth consecutive month, moderating by 76bps to 14.63% y/y in September (August: 15.39% y/y), its lowest level since October 2020. The moderation was driven by a sharper decline in core inflation, which more than offset the slight increase in food inflation. Specifically, the food index edged up marginally by 2bps to 19.59% y/y (August: 19.57% y/y), despite a 1.55% m/m decline in food prices (September 2025: -1.57% m/m), indicating that underlying food price pressures remain elevated. At the same time, core inflation moderated by 34bps to 12.95% y/y (August: 13.29% y/y), reflecting softer price pressures in furnishings & household equipment, health and clothing & footwear sub-components. On a month-on-month basis, headline inflation slowed for the sixth consecutive month to 0.06% in September (August: 0.71% m/m), its lowest reading since January 2026. This moderation reflects a sharp decline in farm produce (-2.86% m/m) and food prices (-1.55% m/m), likely due to higher seasonal harvest supplies, despite higher energy (+5.38% m/m) and core (+1.11% m/m) prices, the latter led by transport (+1.47% m/m). In the near term, we expect headline inflation to moderate further on a y/y basis in October, although the monthly rate is likely to rise. Our outlook reflects continued improvements in food supply and relative exchange rate stability, with a potential easing in energy prices providing additional relief to cost pressures. Accordingly, we expect inflation to rise to 0.84% m/m in October (September: +0.06% m/m), while the annual inflation rate is expected to moderate to 14.53% y/y (September: 14.63% y/y).
Based on the data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil production (including condensates) increased for the second consecutive month, rising by 2.3% m/m to 1.72 mb/d in September (August: 1.68 mb/d), its highest level since June. The improved performance was driven by stable production operations across most producing assets and the absence of major pipeline outages, which enhanced production uptime and crude evacuation efficiency. Notably, the increases recorded across the Erha (+47.2% m/m), Brass (+12.9% m/m), Bonga (+8.6% m/m), Akpo (+7.9% m/m), Nembe (+7.1% m/m), Qua Iboe (+2.6% m/m), Odudu (+1.6% m/m) and Forcados (+0.9% m/m) terminals more than offset the declines across the Agbami (-12.0% m/m), Bonny (-5.2% m/m), Anyala Madu (-4.1% m/m), Tulja-Okwuibome (-1.4% m/m) and Escravos (-0.7% 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 and remain a key risk to our outlook. On balance, we forecast average crude oil production at 1.66 mb/d in 2026E.
Capital Markets
Equities
The domestic stock market closed lower for the third consecutive week, as losses in ZENITHBANK (-6.5%), MTNN (-1.8%), FIRSTHOLDCO (-3.9%) and GTCO (-4.4%) dragged the All-Share Index by 0.3% w/w to 247,539.73 points, bringing the month-to-date and year-to-date returns to -1.5% and +59.1%, respectively. On market activity, trading volume and value declined by 39.0% w/w and 38.0% w/w, respectively. On sector performance, the Banking (-3.1%) and Insurance (-0.1%) indices closed lower while the Oil & Gas (+3.1%) and Consumer Goods (+0.1%) indices closed higher. The Industrial Goods index closed flat.
Looking ahead, we expect market sentiment to improve, supported by (1) bargain hunting following recent price declines, (2) anticipation of Q3 earnings releases and (3) positioning ahead of upcoming dividend qualification dates, which could drive selective buying interest.
Money Market and Fixed Income
Money Market
The OVN rate contracted by 47bps w/w to 20.4%, as inflows from OMO maturities (NGN2.41 trillion) outweighed net NTB PMA (NGN188.22 billion) debit. Meanwhile, average system liquidity increased to a net long position of NGN5.83 trillion from NGN4.02 trillion in the previous week, reflecting the inflow from OMO maturities and the absence of any corresponding liquidity mop-up operation by the CBN.
Next week, system liquidity should remain robust, bolstered by expected inflows of NGN2.07 trillion from OMO maturities. However, the CBN may conduct an OMO auction to absorb part of the surplus liquidity.
Treasury Bills
The Treasury bills secondary market traded on a bearish note as the average yield across all instruments expanded by 1bp to 18.2%. By segment, average NTB secondary market yields contracted by 1bp to 17.9%, as unmet demand at Wednesday’s (14th October) NTB PMA filtered into the secondary market. Meanwhile, average yields in the OMO secondary market expanded by 8bps to 18.7%, due to pockets of selling activities across the curve. At the NTB PMA, the DMO offered NGN450.00 billion across tenors, with total demand reaching NGN1.03 trillion; the DMO ultimately allotted NGN269.06 billion. Stop rates expanded by 5bps to 15.90% for the 364-day tenor while it stayed unchanged at 15.50% and 15.80% for the 91- and 182-day tenors, respectively.
Looking ahead, we expect the Treasury bills secondary market to maintain a broadly mixed tone, with OMO bills likely to attract stronger demand given their relatively more attractive yield offering.
Bonds
The FGN bond secondary market traded on a bearish note, as the average yield across instruments widened by 26bps to 16.4%, as investors continued to reprice the yield curve following the rate cut and in anticipation of substantial issuances in Q4-26. Across the benchmark curve, the average yield expanded at the short (+16bps), mid (+32bps) and long (+19bps) segments reflecting selloffs of the MAR-2027 (+103bps), MAY-2033 (+68bps) and SEP-2036 (+56bps) bonds, respectively.
Next week, we expect the DMO to conduct a bond auction on Monday 19th October, with NGN1.75 trillion on offer across the 2034s (NGN500.00 billion), 2036s (NGN800.00 billion) and 2038s (NGN450.00 billion). Given the sizable supply, we expect upward pressure on marginal rates at the auction. The auction outcome should, in turn, provide direction for secondary market bond yields. Over the medium term, substantial government borrowing needs are likely to keep yields relatively elevated, although monetary policy trajectory, sustained foreign portfolio inflows, and continued disinflation should cap the upward movement in yields.
Foreign Exchange
The naira depreciated by 0.1% w/w to NGN1,333.09/USD, as renewed domestic demand outweighed the impact of the CBN’s USD430.60 million intervention. Meanwhile, gross external reserves increased by USD27.75 million to USD55.09 billion (15th October 2026). In the forwards market, the naira appreciated in the 1-month (+1bp to NGN1,352.89/USD), 3-month (+8bps to NGN1,370.80/USD), 6-month (+22bps to NGN1,436.75/USD), and 1-year (+65bps to NGN1,531.01/USD) contracts.
We expect the naira to remain broadly stable around current levels in the near term, supported by a strong foreign reserve position and a continued current account surplus. That said, downside risks remain from lower domestic yields and tighter global financial conditions.