GLOBAL ECONOMY
The US economy grew by 1.60% in Q1 2026, up from 0.50% in Q4 2025 but below the earlier 2% estimate, reflecting downward revisions to consumer spending (1.40% vs. 1.60%) and investment (7% vs. 8.70%); spending was driven by services (1.80%) while goods remained weak (0.40%), and although equipment (+17.20%) was strong, declines in structures (-5.40%) and residential (-6.20%) weighed on overall investment. Net exports detracted more heavily as imports surged faster than exports while government spending rebounded to 4.40% from -5.60%. On inflation, monthly Personal Consumption Expenditures (PCE) eased to 0.40% from 0.70%, while core PCE moderated to 0.20% from 0.30%; however, on a yearly basis, headline PCE accelerated to 3.80% from 3.50% and core PCE rose to 3.30% from 3.20%, remaining well above the Fed’s 2% target.
The British pound fell over 1% in May to around £1/$1.34, reflecting heightened political and economic pressures, with uncertainty rising after Prime Minister Keir Starmer’s Labour Party suffered heavy local election losses, triggering leadership concerns and market volatility. This came alongside a fragile macro backdrop, as UK inflation remained elevated due to energy costs, while core inflation eased slightly and growth stayed weak with GDP expanding only modestly. At the same time, labour market conditions are softening and economic activity moderating, prompting investors to scale back expectations for further Bank of England (BoE) tightening, especially as oil prices eased from recent highs.
The Euro traded broadly steady around €1/$1.17, heading for a 0.80% monthly decline, as markets weighed mixed inflation signals and policy expectations; flash May inflation accelerated in France, Italy, and Spain but slowed in Germany, though all remained above the European Central Bank (ECB’s) 2% target, reinforcing the view that price pressures are still elevated. ECB minutes indicated a more hawkish stance, with some policymakers supporting an earlier rate hike, strengthening expectations of a 25bps increase at the June 11 meeting. Meanwhile, external risks persisted, with investors monitoring a proposed 60‑day US‑Iran ceasefire extension (pending approval) and rising geopolitical tensions following escalation near the Russia‑Ukraine border, leaving the Euro pressured by a combination of policy tightening expectations, uneven inflation dynamics, and geopolitical uncertainty.
China’s economic outlook remains mixed, with Foreign Direct Investment (FDI) inflows falling 10.30% year-on-year (y-o-y) to ¥287.70billion in Jan–Apr 2026, highlighting weaker external investor sentiment, although high‑tech investment rose 20.30% to account for 40.40% of total inflows, supported by strong growth in R&D and electronics-related manufacturing; manufacturing FDI remained modest (¥78.89billion) while services dominated (¥204.22billion). By source, inflows improved from key economies including Luxembourg (+110.30%), Switzerland (+60.80%), France (+58.30%), and the US (+24.50%), even as broader flows declined. Meanwhile, rising trade tensions with the EU and global geopolitical risks weighed on sentiment, reflected in equity market divergence. On the trade front, China signaled deeper external engagement, announcing it will open its market to coffee imports from 53 African countries from July 2026, reinforcing efforts to diversify trade partnerships.
Next week, the ongoing conflict between the US and Iran will set the pace for global markets after reports of progress in a deal that includes restoring trade through the Strait of Hormuz.
GLOBAL MARKETS
US equities rose to record highs on Friday as markets gauged the sustainability of the AI rally and assessed the outlook of oil supply from the Middle East and its impact on inflation following the extension of the ceasefire. Compared to last week, the Nasdaq, S&P 500 and Dow Jones indices increased by 2.89%, 1.43% and 0.90% to 30,333.18, 7,580.06 and 51,032.46, respectively.
European stocks closed mix as sentiment was pressured after the US carried out air strikes on targets in Iran, driving oil prices higher and underscoring the fragility of recent peace talk momentum. Mid-week, positive developments in the Middle East after reports that the US and Iran agreed to extend their ceasefire by 60 days, pending approval from President Donald Trump caused stock prices to move higher and Oil prices lower on expectations that the truce could hold. Compared to last week, the FTSE 100 index decreased by -0.54% to 10,409.28, while the German DAX and CAC 40 indices increased by 0.89% and 0.83% to 25,104.70 and 8,183.34, respectively.
Asian stocks closed mixed following market doubts which erased earlier gains as investors turned cautious over renewed China-EU trade tensions. Compared to last week, the Hang Seng decreased by -1.65% to 25,182.39 while the Topix index increased by 1.66% to 3,957.17.
Next week, we expect mixed trading as strong earnings from the world’s largest companies clash with the inflationary impact of the war.
DOMESTIC ECONOMY
Nigeria Gross Domestic Product Growth Accelerates to 3.89% in Q1 2026 as Non-Oil Sector Drives 96.08% of Output, Nominal Economy Hits ₦110.79trillion
Nigeria’s economy grew by 3.89% year-on-year in real Gross Domestic Product (GDP) terms in the first quarter of 2026, up from 3.13% in Q1 2025, with nominal GDP rising by 17.79% to ₦110.79trillion from ₦94.05trillion, driven largely by the Non-oil sector which expanded by 3.94% and accounted for 96.08% of total output, while the Services sector led growth at 4.31% contributing 57.73% of GDP and Agriculture rebounded strongly to 3.15% from 0.07% in the prior year. The Oil sector grew by 2.57% despite a decline in average production to 1.55 million barrels per day from 1.62 million barrels per day, contributing 3.92% to GDP, while the Industrial sector maintained steady growth of 3.50% supported by Construction expansion of 6.38% and Manufacturing nominal growth of 10.22%, highlighting broad-based economic resilience anchored on telecommunications, trade, financial services, and infrastructure activities amid improving macroeconomic stability and sustained non-oil sector dominance.
Nigeria Money Supply Hits ₦124.99trillion as Liquidity Expands Despite Central Bank of Nigeria Tightening, Bank Reserves Rise and Cash Outside Banks Declines
Nigeria’s broad money supply (M3) rose by ₦1.87trillion to ₦124.99trillion in April 2026 from ₦123.12trillion in February, reflecting continued liquidity expansion despite Central Bank of Nigeria (CBN) tightening efforts, with year-on-year growth from ₦119.22trillion in April 2025 underscoring sustained monetary expansion; the increase was driven by net domestic assets which climbed to ₦100.97trillion from ₦97.55trillion, even as net foreign assets declined to ₦24.01trillion from ₦25.57trillion, while monetary policy remained relatively tight with the Monetary Policy Rate (MPR) at 26.50%, Cash Reserve Ratio (CRR) at 45.00% for commercial banks and 16.00% for merchant banks, and Liquidity Ratio at 30.00%.
Alongside rising liquidity, currency outside banks fell by ₦104.76billion or 2.02% to ₦5.08trillion from ₦5.19trillion, with its share of total currency dropping to 90.03% from 90.87%, indicating improved cash retention within the banking system, while total currency in circulation eased to ₦5.65trillion from ₦5.71trillion, and bank reserves increased strongly by ₦1.86trillion or 5.68% to ₦34.60trillion, highlighting stronger liquidity buffers, even as year-on-year figures show cash dominance persists with currency outside banks rising 11.29% and total circulation up 12.60%, reinforcing concerns that excess liquidity is not fully translating into productive economic activities.
Nigeria Fiscal Deficit Shrinks 90.68% to ₦0.33trillion in Q3 2025 as Revenue Gains and Spending Cuts Strengthen Public Finances
Nigeria’s fiscal deficit narrowed sharply to ₦0.33trillion in the third quarter of 2025, representing a significant reduction of ₦3.20trillion or 90.68% below the projected ₦3.53trillion and far lower than the ₦3.17trillion recorded in Q3 2024, driven by improved revenue mobilization and tighter expenditure control, as total government spending came in at ₦8.03trillion – ₦5.71trillion or 41.57% below the prorated budget of ₦13.75trillion but 4.86% higher than ₦7.64trillion in Q3 2024. The deficit-to-Gross Domestic Product (GDP) ratio stood at 2.29%, within the 3% Fiscal Responsibility Act and Economic Community of West African States (ECOWAS) threshold, while financing was supported by ₦970billion in domestic borrowing, ₦120.61billion in privatization proceeds, and ₦3.13trillion in multilateral and bilateral loans, amid ongoing concerns over elevated debt service which consumed 69.41% of revenue (₦6.94 of every ₦10), highlighting persistent fiscal pressures despite reforms, even as economic growth reached 3.98% in the quarter, signaling gradual macroeconomic stabilization.
Nigeria Private Sector Credit Plunges ₦14.02trillion in Two Months Despite CBN Policy Easing, Signals Lending Weakness Amid Rising Liquidity
Nigeria’s private sector credit fell sharply by ₦14.02trillion, declining from ₦94.61trillion in February 2026 to ₦80.59trillion in April 2026, despite the CBN easing monetary conditions, highlighting persistent weaknesses in credit transmission to productive sectors though lending remained above ₦78.07trillion recorded in April 2025 on a year-on-year basis, broader financial indicators showed tightening credit conditions, with net domestic credit dropping to ₦120.18trillion from ₦133.97trillion and other assets (net) declining to ₦11.88trillion from ₦20.75trillion, even as net domestic assets rose to ₦100.97trillion from ₦97.55trillion, indicating sustained liquidity that is not translating into real sector financing.
Petrol Price Surges to ₦1,532.93 per Litre as Oil Revenue Misses Target by 61.80% and Global Crude Volatility Persists
Nigeria’s energy and fiscal landscape showed mixed pressures as the average retail price of Premium Motor Spirit (PMS) rose sharply by 18.97% month-on-month and 23.69% year-on-year to ₦1,532.93 per litre in April 2026 from ₦1,288.54 in March, with state prices peaking at ₦1,599.05 in Yobe and dipping to ₦1,403.89 in Niger, while zonal averages ranged from ₦1,566.76 in the South-South to ₦1,508.81 in the North-West, reflecting deregulation, foreign exchange pressures, and distribution inefficiencies.
Simultaneously, Nigeria’s oil revenue underperformed significantly in Q3 2025 at ₦4.87trillion, falling short of the ₦12.76trillion target by ₦7.88trillion or 61.80% despite modest growth of 2.10% quarter-on-quarter and 5.41% year-on-year, driven by shortfalls in Petroleum Profit Tax (₦1.97trillion vs ₦7.85trillion) and royalties (₦2.01trillion vs ₦3.43trillion), even as global crude prices declined by nearly 6% to about $105 per barrel amid easing geopolitical tensions, although earlier price strength above $110 per barrel had generated an estimated ₦5.13trillion windfall for Nigeria, cushioning fiscal pressures despite production constraints at 1.66 million barrels per day compared to the 2.10 million barrels per day benchmark, highlighting persistent structural vulnerabilities across both domestic energy pricing and oil revenue performance.
Next week, we await the release of the Purchasing Managers Index for May to gauge the Manufacturing strength of the economy while weak credit expansion and fiscal challenges weigh on Investors’ sentiment.
EUROBOND MARKET
Nigeria’s sovereign Eurobond market closed stronger during the week, with average yields declining by 17 basis points to 6.78%, reflecting improved sentiment and renewed investor demand across the curve. The compression in yields indicates stronger appetite for dollar-denominated sovereign assets, as investors increased exposure amid relatively supportive market conditions and improving risk perception.
Performance was largely underpinned by growing demand for higher-yielding emerging market assets, alongside improving external reserve dynamics, which continue to support Nigeria’s credit outlook.
We expect sentiment to remain relatively positive in the near term, supported by sustained investor appetite for high-yield EM bonds. However, market direction will remain sensitive to global interest rate expectations, US Treasury yield movements, and broader risk sentiment across emerging markets.
ALTERNATIVE ASSETS
GOLD
Gold traded sideways to slightly higher, closing around $4,495.57–$4,540.00/oz (+0.30% w/w) amid continued volatility. Elevated US Treasury yields (4.60–4.70%) and a firm dollar remained the key headwinds, reinforcing a higher-for-longer rate environment, while geopolitical risks provided limited support. Overall, gold remains range-bound with a slight downside bias.
OIL
Oil prices corrected lower, with Brent at $91.10–$91.70/bbl and WTI $87–$89/bbl, as easing supply concerns weighed on markets. Volatility remained elevated (Brent ~$90–$98 range), driven by US–Iran negotiations and Hormuz supply dynamics, with improving supply expectations capping upside. Near-term outlook is headline-driven with a softer bias.
ETF
Flows stayed defensive, with about $29.66billion inflows into bond funds highlighting strong demand for yield. Commodity flows were muted, with prior outflows and softer gold ETF demand reflecting rate pressure and profit-taking.
Gold is expected to remain range-bound around the $4,400–$4,600 band, with a slight downside bias driven by firm real yields and USD strength, though geopolitical risks should limit deeper corrections. Oil will likely remain headline-sensitive, but with a softening bias toward the $88–$95 range for Brent equivalents, as markets reassess supply risks amid evolving diplomatic developments. ETF flows should continue to favour fixed income, while commodity allocations remain cautious and opportunistic, reflecting elevated volatility and shifting macro expectations.
DOMESTIC MARKETS
MONEY MARKET AND FIXED INCOME
Liquidity in the banking system stayed robust throughout the week, opening the week at a credit of ₦3.81trillion, an increase of ₦703.51bllion from the previous week’s close, attributed to an additional FAAC inflows and Cash Reserve Ratio settlement, liquidity increased on Tuesday by ₦133.07billion to ₦3.943trillion with Wednesday and Thursday being public holidays, Liquidity closed the week in a credit of ₦6.01trillion on Friday, an increase of ₦2.07trillion owing to OMO maturity into the system. Consequently, the Overnight Financing Rate (NOFR) remained unchanged week on week at 22.00%.
Next week, we expect slight decline in liquidity as attention shift to the Nigerian Treasury Bills Primary Market where the DMO is offering a total of ₦700billion across various tenors.
EQUITIES MARKET
The Nigerian equities market closed the week on a slightly positive note as the NGX All-Share Index and Market Capitalization appreciated by 0.27% to close the week at 250,385.47 and ₦160.51trillion respectively compared to 249,712.37 and ₦160.08trillion last week.
A total turnover of 2.40 billion shares worth ₦111.48billion in 241,313 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 3.88 billion shares valued at ₦161.76billion that exchanged hands last week in 334,745 deals.
On a sectoral basis, most sectors closed negative, with the Oil and Gas and Insurance indices rising by 2.53% and 1.41% while the Banking, Consumer Goods and Industrial Goods indices fell by 2.43%, 1.52% and 0.05%,
Notable gainers this week were International Energy Insurance PLC and Sovereign trust Insurance PLC while The Initiates PLC and Dangote Sugar Refinery PLC topped the losers list.
Next week, we expect cautious trading with the Equities market expected to remain cautiously positive with interest driven by deep stock fundamentals.
CURRENCY
| (₦/$) | 29/05/2026 | 22/05/2026 | W-O-W% |
| NAFEM | 1,373.25 | 1,375.46 | -0.16% |
| Parallel | 1,400.00 | 1,400.00 | 0.00% |
TOP GAINERS
| TICKER | OPEN | CLOSE | CHANGE | % |
| INTENEGINS | 3.41 | 4.52 | 1.11 | 32.55% |
| SOVRENINS | 2.28 | 2.75 | 0.47 | 20.61% |
| TANTALIZER | 4.13 | 4.89 | 0.76 | 18.40% |
| AIRTELAFRI | 3,323.40 | 3,655.70 | 332.30 | 10.00% |
| NEM | 30.00 | 32.90 | 2.90 | 9.67% |
TOP LOSERS
| TICKER | OPEN | CLOSE | CHANGE | % |
| DANGSUGAR | 87.00 | 71.15 | -15.85 | -18.22% |
| TIP | 33.80 | 28.40 | -5.40 | -15.98% |
| PREMPAINTS | 37.50 | 33.75 | -3.75 | -10.00% |
| CAP | 199.00 | 179.10 | -19.90 | -10.00% |
| TRANSCORP | 272.70 | 245.50 | -27.20 | -9.97% |
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