Nigeria’s headline inflation rate eased marginally to 15.39% YoY in August 2026, from 15.43% in July, according to the latest Consumer Price Index released by the National Bureau of Statistics (NBS). The reading was also significantly lower than the 23.14% recorded in August 2025, extending the broader disinflation trend. The more immediate monthly movement showed a stronger moderation, with inflation slowing to 0.71% MoM from 1.57% in July, indicating that prices continued to rise but at a much slower pace. The slowdown was largely supported by easing food price pressures, with food inflation falling to 19.57% YoY from 20.31% in July and the monthly food inflation rate declining sharply to 1.02% from 5.56%. Underlying price pressures also weakened during the month, with core inflation, which excludes volatile agricultural produce and energy, falling to 13.29% YoY from 14.97% in July. Overall, the latest data points to a continued easing in inflationary pressures and could provide room for the CBN to consider monetary easing, particularly if the downward trend in monthly inflation is sustained. However, food prices remain elevated, meaning the pace of disinflation will remain important for the CBN’s policy outlook and for fixed-income markets.
Money Market
System liquidity saw an increasing trend throughout the trading week, opening at ₦2.55 trillion on Monday and closing at ₦2.85 trillion driven by primary market repayment. Week-on-week, the Nigerian Overnight Financing Rate (NOFR) held steady to close at 22.00%, while the Overnight (OVN) rates increased by 9bps to close at 22.24%.
We expect rate to continue to hover around this level.
Treasury Bills Market
The Treasury Bills market traded on a calm note this week, with activity largely subdued as investors remained cautious. The week began with limited activity, as investors shifted their attention to the bond auction conducted by the DMO, with the newly issued 9-Sept bill quoted around 16.60%/16.30% to start the week. As the week progressed, the CBN announced an OMO auction offering ₦1trn across various tenors following the ₦3.03trn OMO maturity into the system. At the auction, total subscriptions came in at ₦3.03trn, with the CBN allotting ₦2.51trn, where the 153-day attracted the bulk of demand. Stop rates closed at 19.25%, 19.05%, and 18.39% across the 69-day, 90-day, and 153-day bills, respectively. We saw post-auction demand as buying interest was seen on the 16-Feb bill, with trades executed at 18.30% (9bps lower from auction’s close) . By the weekend, activity remained subdued, although the 9-Sept bill continued to attract some interest and was seen trading at 16.55% levels. Week-on-week, the average benchmark yield declined by 6bps to close at 18.71%.
Looking ahead, we expect a cautious session as market participants look forward to the upcoming NTB auction.
FGN Bond Market
The FGN Bond market traded on a mixed note this week, as strong demand at the bond auction was followed by profit-taking and a gradual repricing in the secondary market. The week began with investors focused on the bond auction where the DMO was offering 1trn across the 2036 and 2038 maturity, which attracted ₦1.49trn in subscriptions, while only ₦748.63bn was allotted, reflecting the DMO’s continued measured approach to borrowing. Stop rates on the new 2036s and the 2038s cleared at 16.79% and 16.85%, respectively, with the 2038s declining by 94bps from the previous auction. Initial post-auction demand from unallotted investors temporarily pushed yields lower. However, sentiment weakened as investors began to take profits, while activity remained light as investors awaited inflation data. Headline inflation moderated to 15.39% y/y in August from 15.43% in July, pointing to a further easing in inflationary pressures. Despite the improved macro conditions, persistent selling pressure gradually pushed the 2038s back to the 17% handle. By the weekend, the market showed some little signs of improvement, with the on-the-run maturities closing around 16.90% levels. On the data front, Nigeria’s inclusion in the new GBI-EM Edge Index further improves the visibility of the local bond market within frontier debt markets and could support increased foreign investor interest. Week-on-week, the average benchmark yield increased by 1bp to close at 16.29%.
We expect a calm session as market participants stay on the sidelines in anticipation of the upcoming MPC policy decision.
FGN Eurobond Market
The Eurobond market traded on a mixed note this week, as renewed buying interest emerged following the recent sell-off and the Fed’s policy decision. The week began on a bearish note, as renewed Houthi attacks on Saudi Arabia raising concerns over further escalation and disruptions to global oil supplies. Meanwhile, the 10-year U.S. Treasury yield moved above 5% for the first time since 2023, as elevated oil prices continued to fuel inflation concerns. Sentiment improved as investors positioned ahead of the Fed decision, as markets participants were widely expecting a 25bps rate hike. Following the Fed’s decision to raise its policy rate by 25bps to 3.75%–4.00%, and hawkish comments from Fed’s Chair Kevin Warsh, bonds maintained a positive tone as investors viewed the decision as a sign of the Fed’s commitment to containing energy-driven inflation and maintain its independence. By the weekend, sentiment was further supported by signs of easing tensions around the Iran conflict, after President Trump indicated that the war could be nearing an end and that discussions with Tehran were possible. Week-on-Week, the average benchmark yield increased by 2bps to close at 7.00%.
We expect market direction to be driven by evolving geopolitical developments and PMI data.
Currency Market
The value of the Naira to the dollar depreciated by 0.35% week on week to close at ₦1,331.20/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) increasing by 1.42% to close at 249,804.56 points while market capitalisation also increased to close at N162.20 trillion. Market breadth was positive at 1.69x. Trading activity was active on the day, with the volume of shares traded declining by 52.15% to 521.00 million units, while total value of shares traded declined by 31.28% to ₦29.80 billion.
Reflecting the week’s performance, the NGX All-Share Index appreciated by 2.78%, as gains in UPDCREIT (+34.91%), SOVRENINS (+30.95%), and MBENEFIT (+22.03%) were offset by declines in TRANSPOWER (-18.94%), JOHNHOLT (-18.89%), and ELLAHLAKES (-18.14%).
Overall, the NGX has posted a year-to-date gain of 60.53%. Other notable indices are the NGX Top 30 Index (1.49%; 3.01% 1WK; 62.12% YTD), NGX Banking Index (2.23%; 4.67% 1WK; 74.22% YTD), NGX Oil & Gas Index (0.01%; 3.88% 1WK; +125.94% YTD), and NGX Insurance Index (1.03%; 5.83% 1WK; -7.57% YTD).
