Nigeria’s headline inflation continued to moderate in July, easing to 15.43% YoY from 15.91% in June, marking the second consecutive monthly decline. On a month-on-month basis, inflation also slowed to 1.57% from 1.66%, supported largely by a decline in core inflation to 14.97% from 15.92%. The moderation reflected slower price increases across several non-food categories, including transport and accommodation services. However, food inflation remained a major source of pressure, rising sharply to 20.31% from 17.52%, driven by higher prices of staple food items amid seasonal supply constraints and elevated transportation costs. Housing and energy-related costs also increased during the month. Overall, the July print points to continued progress in headline inflation, although persistent food price pressures could slow the pace of further disinflation. We expect CBN to remain cautious, as the improvement in headline inflation will need to be sustained before it provides a stronger case for a change in the current policy stance.
The Nigerian Exchange has postponed the rollout of its revised equities pricing methodology, which was scheduled to take effect on August 17, 2026. The new framework was expected to introduce a tiered system that would determine the minimum volume required for trades to move share prices, replacing the existing structure. Under the proposed rules, higher-priced stocks would require lower trading volumes to trigger price movements, a change that could have increased activity and price movements in some premium counters. However, the NGX has clarified that the framework has only been postponed and not cancelled, with a new implementation date expected to be announced after further engagement with relevant stakeholders. The existing pricing rules will therefore remain in place for now, while investors and market operators await further clarity on when the revised methodology will take effect.
Money Market
https://www.digital.zenithbank.com/ZEQ/ZEQ-jan-2026/index.html#p=1System liquidity saw an increasing trend throughout the trading week, opening at ₦3.37 trillion on Monday and closing at ₦4.47 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 declined by 11bps to close at 22.14%.
We expect rate to continue to hover around this level.
Treasury Bills Market
The Treasury Bills market traded on a mixed, albeit positive note this week, supported by scarce supply and sustained demand across the curve. The market opened on a calm note as participants adopted a wait-and-see approach ahead of the bond auction, the newly issued 12-Aug-2027 bill was seen quoted at 17.40%/17.30% to start the week. As the week progressed, renewed buying interest emerged across the curve, pushing the 12-Aug-2027 bill as low as 17.20%/17.10%, reflecting the continued demand for the newly issued paper. The bullish momentum was sustained into the end of the week, as trades was seen executed at 17.15%. Week-on-week, the average benchmark yield increased by 1bp to close at 18.74%.
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 bullish note this week, following the bond auction which saw stop rates decline significantly across the offered maturities. The DMO offered ₦1.1trn across the 2035, 2037 and 2038 maturities, attracting total subscriptions of ₦1.73trn, while the DMO allotted ₦805.15bn. Bullish sentiment filtered into the secondary market following the lower-than-expected stop rates, with buying interest concentrated on the on-the-run maturities. As the week progressed, activity moderated with buying and selling interest remaining thin across the curve, as the auction driven demand gradually faded. However, renewed demand emerged on the mid-to-long end, as the 2038 maturity saw improved bids. Towards the end of the week, activity remained subdued, with the 2035 and 2037 maturities largely trading around previous closing levels. The 2038 maturity, however, weakened marginally by 5bps to close at 17.40%. Week-on-week, the average benchmark yield declined by 11bps to close at 16.67%.
Looking ahead, we expect activity to remain subdued as market participants assess current yield levels and await fresh catalysts.
FGN Eurobond Market
The Eurobond market traded on a mixed note this week, as uncertainty surrounding the U.S.-Iran conflict continued to weigh on sentiment. The expiry of the 60-day deadline for a peace deal, with both sides ruling out an extension, renewed concerns over a potential escalation. Sentiment improved midweek following reports of U.S. intervention to buy back longer-dated bonds, which pushed yields lower. However, renewed geopolitical tensions limited gains, after President Donald Trump announced plans for what he described as a “crushing economic operation” against Iran. By week-end, the market was on a positive note after Treasury Secretary Scott Bessent indicated that pursuing maximum economic pressure on Iran could reduce the need for a large-scale military escalation, easing concerns over a broader escalation in the conflict. Week-on-Week, the average benchmark yield increased by 5bps to close at 6.88%.
We expect market direction to be driven by evolving geopolitical developments, PCE data and Fed’s Chair Speech.
Currency Market
The value of the Naira to the dollar appreciated by 0.82% week on week to close at ₦1,346.49/$ 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 0.07% to close at 241,196.64 points while market capitalisation declined to close at N154.50 trillion. Market breadth was negative at 0.90x. Trading activity was active on the day, with the volume of shares traded decreasing by 86.12% to 398.30 million units, while total value of shares traded increased by 2.20% to ₦31.35 billion.
Reflecting the week’s performance, the NGX All-Share Index depreciated by 1.06%, as gains in HMCALL (+32.30%), TRANSEXPR (+16.20%), and DANGSUGAR (+5.19%) were offset by declines in INTENEGINS (-27.26%), FTGINSURE (-23.95%), and ROYALEX (-18.49%).
Overall, the NGX has posted a year-to-date gain of 54.36%. Other notable indices are the NGX Top 30 Index (0.07%; -1.15% 1WK; +55.23% YTD), NGX Banking Index (-0.80%; -3.15% 1WK; +63.18% YTD), NGX Oil & Gas Index (2.54%; -5.24% 1WK; +85.76% YTD), and NGX Insurance Index (-0.69%; -5.19% 1WK; -8.65% YTD).
