October 19, 2026/United Capital Update
Global Markets
United States
US inflation accelerated to 3.7% year-on-year (y/y) in September 2026, up from 3.4% in August and above market expectations of 3.6%, largely driven by higher energy prices. Gasoline Index rose by 34.2% y/y, while fuel oil Index increased by 74.2% y/y. Shelter Index also accelerated by 3.2% y/y, whereas food Index rose to 2.5% y/y. On a monthly basis, headline inflation increased by 0.6%, compared with 0.4% in August, marking its largest rise in five months. Gasoline prices jumped 9.1%, accounting for more than half of the monthly increase. Meanwhile, annual core inflation, which excludes food and energy, rose to 2.6% from 2.4%, exceeding forecasts of 2.5%. Monthly core inflation remained at 0.3%, above expectations of 0.2%, indicating persistent underlying price pressures.
Euro Area
The International Monetary Fund (IMF) upgraded its 2026 Euro Area growth forecast by 0.2% to 1.1%, from a 0.9% forecast in July. This reflects stronger-than-expected economic resilience. AI investment and higher defence spending are supporting the outlook, alongside stronger activity in Germany’s chemical industry and its integration into AI supply chains. This upgrade signals improved growth prospects for European businesses and demand. This could support Euro Area equities and the Euro. However, elevated inflation could limit the European Central Bank’s scope to cut interest rates.
Asia
Japan’s Producer Price Inflation (PPI) eased to 6.8% year-on-year in September 2026, below market expectations of 7.6%, marking its slowest growth since May. Price increases moderated across transport equipment, food and beverages, petroleum and coal, production machinery, and textiles. However, inflation accelerated in chemicals, iron and steel, electrical machinery, metal products, electronic components, and information and communications. On a monthly basis, producer prices fell by 0.3%, matching August’s revised decline and marking a second consecutive monthly contraction. This also contrasted with expectations of a 0.5% increase, suggesting easing upstream price pressures.
Oil Markets
Brent crude oil price rose by 1.57% week-on-week to US$105.92/b, while Bonny Light price declined by 5.83% to US$127.06/b. Despite the divergent weekly movements, both benchmarks remained elevated, with Brent and Bonny Light prices up 74.07% and 100.35% year-to-date, respectively.
Outlook
Global markets will focus on US economic data, corporate earnings, and Central Bank policy signals this week. Investors will assess inflation trends for clues about the Federal Reserve’s next interest-rate decision. In the Euro Area, attention will centre on inflation developments and bond yields, while China’s economic data will provide insights into domestic demand and export activity. Meanwhile, elevated energy prices could sustain inflationary pressures and keep borrowing costs high. Strong Q3 corporate earnings may support equities, although persistent price pressures could delay monetary easing and provide further support for the Dollar.
Domestic Economy
Nigeria’s annual inflation rate eased to 14.63% in September 2026, from 15.39% in August, marking a further moderation in price pressures. The decline was supported by lower core inflation, which fell to 12.95% from 13.29%, while urban and rural inflation eased to 15.64% and 12.46%, respectively. Food inflation edged up to 19.59% from 20.16% in the same period in 2025. United Capital Research believes with appropriate policy measures in place single digit inflation is achievable by mid year 2027.
Equity Market
The Nigerian equities market closed the week lower, with the NGX All-Share Index (NGX-ASI) declining 0.33% week-on-week to 247,539.73 points. Consequently, the market’s year-to-date return moderated to 59.07%, while sector performance remained varied. The Banking and Insurance Indices declined by 3.15% and 0.14%, respectively. Conversely, the Oil/Gas and Consumer Goods Indices gained 3.13% and 0.09%, respectively, while the Industrial Goods Index remained broadly unchanged.
Fixed Income and Money Market
The fixed-income market recorded divergent movements during the week, as Nigerian Treasury Bill (NTB) and FGN Bond yields increased, while interbank rates declined. In the NTB market, the 91-day, 182-day and 364-day yields rose by 0.27%, 0.07% and 0.41% to 17.53%, 17.89% and 18.62%, respectively. Similarly, FGN Bond yields increased across all tenors, with the 3-year, 5-year, 7-year and 10-year yields rising by 0.27%, 0.50%, 0.52% and 0.50% to 16.48%, 17.00%, 16.89% and 17.00%, respectively. Meanwhile, the Overnight (O/N) rate and Open Repo Rate (OPR) declined by 0.44% and 0.40% to 20.38% and 20.00%, respectively, indicating lower short-term funding costs during the week.
Outlook:
Equity Market
This week, the Nigerian equities market is expected to draw support from bargain hunting, corporate earnings expectations, and renewed interest in fundamentally strong stocks. However, profit-taking and shifts in investor positioning may limit market gains. With inflation moderating, expectations of lower fixed-income yields could also support equities, making stocks more attractive to investors relative to fixed-income instruments. Investors will monitor economic data and third-quarter earnings releases for signs of improving economic conditions and stronger corporate profitability. The market’s strong year-to-date performance may sustain selective buying interest, particularly in banking, industrial goods, and consumer stocks with attractive valuations.
Fixed Income Market
This week, the Nigerian fixed-income market will focus on Treasury Bill auctions, Open Market Operations (OMO), and liquidity conditions. Recent increases in Treasury Bill and Federal Government of Nigeria (FGN) Bond yields suggest investors may demand higher returns, although declining interbank rates could ease short-term funding pressures. The decline in inflation strengthens expectations of lower fixed-income yields, potentially supporting bond prices and creating capital-gains opportunities. Investors may consider increasing exposure to longer-tenor bonds to lock in prevailing yields. However, fresh Central Bank of Nigeria (CBN) liquidity withdrawals and government borrowing could limit yield declines. Investors will monitor inflation trends, auction outcomes, and liquidity movements for direction, as these factors will shape demand across short- and long-dated securities.