Nigeria’s headline inflation eased sharply to 15.15% in December 2025 following a methodological review by the National Bureau of Statistics (NBS), signaling a notable moderation in price pressures. The Consumer Price Index (CPI) rose modestly to 131.2 points from 130.5 in November, while year-on-year inflation declined from 17.33% in November and fell significantly from 34.80% in December 2024. On a month-on-month basis, inflation slowed to 0.54% from 1.22%, pointing to easing short-term price momentum across the economy. The NBS explained that the sharp deceleration largely reflects a rebasing of the CPI methodology, with year-on-year inflation now calculated using a twelve-month average index for 2024 set at 100, rather than a single-month base. This adjustment, aligned with IMF and ECOWAS best practices, was aimed at avoiding artificial inflation spikes driven by base effects. As a result of the rebasing exercise, November inflation was revised upward to 17.33% from the previously reported 14.45%, underscoring the impact of the methodological shift on recent inflation readings.
The European Union has removed Nigeria from its list of high-risk jurisdictions for money laundering and terrorism financing, a move expected to ease cross-border transactions and support investor confidence. The decision, published by the European Commission, follows Nigeria’s exit from the Financial Action Task Force (FATF) greylist in 2025 after a series of anti-money laundering and counter-terrorism financing reforms. Under the updated framework, enhanced due diligence requirements on Nigeria-related transactions will be lifted from January 29, 2026, subject to procedural approval by the European Parliament and the Council of the EU. The Commission said the revision reflects FATF decisions taken at its June and October 2025 plenaries, noting that Nigeria was among several countries delisted, while others were added.
Money Market
System liquidity saw an increasing trend throughout the trading week, opening at ₦1.42 trillion on Monday and closing at ₦2.11 trillion. Week-on-week, the Open Buy Back (OBB) was flat to close at 22.50%, while the Overnight (OVN) rates decreased by 10 bps to close at 22.69%.
We expect rate to continue to hover around this level.
Treasury Bills MarketThe Treasury Bills market traded on an active and increasingly bullish note through the week, with improved turnover and sustained demand concentrated on the long end of the curve. Activity was largely driven by the 7 January 2027 NTB, which dominated flows and traded progressively lower in yield, moving from around 18.05%/17.90% earlier in the week to 17.90%/17.80%, then 17.80%/17.75%, before closing the week with trades executed around the 17.50% level. Interest was also observed across other NTB and OMO bills, reflecting steady liquidity and firm investor appetite. Week-on-week, the average benchmark yield increased by 15 bps to close at 18.32%.
We expect the market to open the new week on a calm note as participants position ahead of Wednesday’s NTB auction.
FGN Bond Market The FGN Bonds market started the week on a quiet note, with investors selectively cherry-picking across the curve amid subdued activity, as demand was largely concentrated in the 2032 and 2033 maturities, initially quoted around 18.25%/18.00% and with limited trades seen near 17.90% and 17.95%, respectively. As the week progressed, sentiment turned more constructive, supported by improved offshore demand and short-covering, which drove increased activity and stronger buying interest across the short- to mid-dated segment, pushing yields lower with the 2032 and 2033 maturities trading around 17.70% and 17.80%. The bullish momentum extended further following the softer-than-expected inflation print of 15.15% (down from 17.33% previously, per NBS normalized data), with trades executed on the 2032 maturity as low as 17.40%. However, the market closed the week on a more cautious note as profit-taking emerged and the rally softened, with the 2033 maturity last seen trading around the 17.50% level. Week-on-week, the average benchmark yield edged higher by 12 bps to close at 16.74%.
We expect sentiment to remain cautious as market participants look ahead to the release of the Q1 auction calendar.
FGN Eurobond MarketThe Eurobond market began the week tilted to the downside, as investor sentiment was weighed down by rising concerns over the Federal Reserve’s independence following comments by Chair Powell regarding a DOJ criminal investigation perceived as an attempt to pressure the Fed on interest rates. However, sentiment rebounded in the subsequent session, supported by benign inflation data, with headline CPI printing in line with expectations at 2.7% y/y and Core CPI coming in softer at 2.6% versus the 2.7% forecast. Trading thereafter turned largely flattish as market participants adopted a wait-and-see stance ahead of key macro releases, with Retail Sales declining by 0.6%, slightly weaker than forecast, while PPI (m/m) met expectations at 0.2%. The market regained a bullish bias toward the latter part of the week, buoyed by improved labor data as unemployment claims fell to 198k compared with expectations of 215k, allowing Eurobonds to close the week on a marginally positive note. Week-on-Week, the average benchmark yield decreased by 15 bps to close at 7.07%.
For the week, attention will be focused on Core PCE, GDP, and Flash PMI data for further direction.
Currency Market
The value of the Naira to the dollar appreciated by 0.37% week on week to close at ₦1,417.95/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) appreciating by 0.04% to close at 166,129.50. Market capitalization also appreciated, closing at 106.35 trillion. Market breadth was positive at 1.62x. Trading activity was robust on the day, with the volume of shares traded decreasing by 47% to 539.84 million units, while total value of shares traded decreased by 47% to ₦16.69 billion.
Reflecting the week’s performance, the NGX All-Share Index recorded a 2.36% appreciation, as gains in NCR (+60.79%), SCOA(+59.36%) and DEAPCAP(+48.67%) were offset by declines in IKEJAHOTEL (-12.38%), AUSTINLAZ (-9.20%), and ETERNA (-7.71%).
Overall, the NGX has posted a year-to-date gain of 6.76%. Other notable indices are the NGX Top 30 Index (+0.04%; +3.20% 1WK; +6.27% YTD), NGX Banking Index (+0.38%; +3.31% 1WK; 9.11% YTD), NGX Oil & Gas Index (-0.14%; +5.55% 1WK; +12.20% YTD), and NGX Insurance Index (+0.41%; +1.85% 1WK; +10.98% YTD).
