GLOBAL ECONOMY
The US economy was marked by resilient labor market data and signs of cooling in manufacturing, while monetary policy remained anchored by the Federal Reserve’s earlier December decision to cut the federal funds rate, amid divided views on inflation and employment risks, projected stronger growth for 2026, citing limited tariff impact, as the Fed’s balance sheet expanded modestly to $6.56trillion, underscoring ongoing liquidity support. Initial jobless claims fell sharply to 199,000, well below expectations, and continuing claims dropped to 1.89 million. Manufacturing softened as the S&P Global Purchasing Managers Index (PMI) eased to 51.80 from 52.20, the weakest expansion in five months, with new orders declining for the first time in a year, exports falling for the seventh month, and output growth moderating, though employment rose as firms anticipated better conditions ahead.
The UK S&P Global Manufacturing PMI rose to 50.60 in November from 50.20, marking a second month of expansion after a year of contraction. Output increased across all goods sectors, supported by new orders for the first time in 15 months. However, employment fell for the 14th straight month due to higher labor costs from new insurance contributions, though the pace of decline eased. Input and output prices climbed on rising wages and soaring metal costs.
In the Euro area, the HCOB Eurozone Manufacturing PMI fell to 48.80 in December, below the preliminary 49.20 and November’s 49.60, marking the sharpest contraction since March. Output and new orders declined, led by Germany’s steep deterioration, while Italy and Spain remained weak; France was the exception, posting its strongest expansion since mid-2022. Employment continued to fall, extending job losses beyond two-and-a-half years, and backlogs shrank, signaling ample capacity. Separately, the Euro Area’s M3 money supply grew 3% year-on-year to €17.19trillion in November from €17.07trillion in October, beating expectations, while M1 growth slowed to 5%, and short-term deposits (M2-M1) fell at a softer pace. Growth in marketable instruments (M3-M2) accelerated to 1.60%.
China’s official NBS Manufacturing PMI rose unexpectedly to 50.10 in December from 49.20, its first expansion since March, driven by stronger output (51.70) and purchasing activity (51.10), alongside new orders growing at the fastest pace in nine months. Foreign sales continued to decline but at a slower rate, while employment remained weak. Input costs rose for the sixth straight month, though selling prices fell at a softer pace. The Non-Manufacturing PMI also climbed to 50.20 from 49.50, the highest since August, supported by fiscal spending and consumption incentives, with sentiment reaching a nine-month high. The Composite PMI edged up to 50.70, signaling broad improvement in manufacturing and services. Separately, China’s current account surplus hit a record $199billion from $129billion in Q3 2025, driven by wider goods surplus and a narrower services deficit, bringing the year-to-date surplus to $493billion.
Next week, US data will be headlined by a batch of labour market surveys including the BLS December jobs report, the JOLTS, and the ADP Employment Report.
GLOBAL MARKETS
US stocks erased early gains on the first trading day of the year, holding the pullback from recent record highs as fresh software for software companies contrasted with the mixed momentum in other sectors. Compared to last week, the Nasdaq, S&P 500 and Dow Jones indices decreased by -1.71%, -1.03% and -0.67% to 25,206.17, 6,858.47 and 48,382.39, respectively.
European stocks closed sharply higher at new records on the first session of the year, supported by the Tech and Industrial sectors as markets assessed how the macroeconomic backdrop will impact corporate activities this year. Compared to last week, the FTSE 100, German DAX and CAC 40 increased by 0.82%, 0.82% and 1.13% to 9,951.14, 24,539.34 and 8,195.21, respectively.
Chinese stocks closed higher as Investor attention remained focused on geopolitical developments, and traders weighed the potential impact of China’s military drills around Taiwan. Markets also reacted to economic data, with both official and private PMI readings released this week. Compared to last week, the Hang Seng index increased by 2.01% to 26,338.47 and the Topix index decreased by 0.41% to 3,408.97.
Next week, we expect current sentiments to persist as more economic data is released.
DOMESTIC ECONOMY
CBN Projects Inflation Drop, Stronger Reserves and Stable Debt in 2026
Nigeria’s headline inflation is forecast to average 12.94% in 2026, down from 14.45% in November 2025, driven by easing food and PMS prices, according to the CBN’s 2026 Macroeconomic Outlook. Public debt-to-GDP is projected at 34.68%, a slight rise from 33.98% mid-2025, but expected to remain sustainable as exchange rate stability curbs valuation losses. External reserves are set to climb to $51.04billion from $45.01billion in 2025, supported by higher oil earnings, FX reforms, and expanded refining capacity. The CBN anticipates a bullish capital market, buoyed by bank recapitalization and Investor confidence, while policy measures aim to sustain macroeconomic stability and growth.
Nigeria’s Current Account Surplus Falls 41.14% in Q3 2025 Despite Strong Oil Exports
Nigeria recorded a $3.42billion current account surplus in Q3 2025, down 41.14% from $5.81billion in Q2 and below $5.78billion in Q3 2024, according to CBN’s Balance of Payment (BoP) report. Exports rose to $15.24billion (+2.28%), driven by crude oil ($8.45billion, +10.31%) and refined products ($2.29billion, +44.03%), while gas exports fell 30.21% to $2.31billion. Imports climbed to $10.30billion (+7.18%), though refined fuel imports dropped 12.70% to $1.65billion, signaling progress toward net exporter status. External reserves surged to $42.77billion from $37.81billion in Q2, as the overall BoP swung to a $4.60billion surplus from a $0.27billion deficit.
Nigeria’s Private Sector Ends 2025 on Strong Note as PMI Hits 57.60
Composite PMI surged to 57.60 points in December 2025, up from 56.40 in November, marking the fastest expansion of the year, according to CBN data. Output Index climbed to 60, New Orders to 58.70, and Employment to 54.20, signaling robust production, rising demand, and job creation. Industry PMI stood at 57, with 14 of 17 subsectors expanding, while Services and Agriculture PMIs hit 56.40 and 58.50, respectively, extending multi-month growth streaks. Improved supply chains and resilient consumer demand reinforce optimism for sustained private-sector momentum heading into 2026.
Nigeria Swings to Net Lending Position of $320m in Q3 2025 as Reserves Surge
Nigeria posted a $320million net lending position in Q3 2025, reversing a $6.90billion net borrowing in Q2, one of the sharpest quarterly shifts in recent years, per CBN’s BoP report. The turnaround was driven by stronger FDI inflows ($0.72billion vs. $0.09billion), reduced portfolio inflows ($2.51billion vs. $5.28billion), and increased foreign asset holdings. External reserves jumped 13.12% to $42.77billion from $37.81billion, while the overall BoP recorded a $4.60billion surplus versus a $0.27billion deficit in Q2. This shift signals improved external sustainability and FX resilience heading into 2026.
NNPC Targets $30billion by 2030 to Unlock New Oil Fields and Boost Output
NNPC Ltd plans to raise $30billion by 2030 to fund new oil field developments starting in 2026, Bloomberg reports. The strategy includes divesting non-performing assets to generate over half of the target, alongside investor-led projects and competitive bidding from early next year. The move aims to reverse years of declining output and capital flight, leveraging the Petroleum Industry Act to attract private capital. NNPC also targets crude production growth to 1.80 million barrel per day in 2026 and 4 million barrel per day by 2030, while advancing infrastructure projects like the $2.80 billion AKK gas pipeline to bolster energy security and industrialization.
Nigeria’s Banking Sector NPLs Hit 7% After Forbearance Ends, Above 5% Prudential Limit
The CBN reports that Non-Performing Loans (NPLs) in Nigeria’s banking sector rose to 7% in 2025, breaching the 5% prudential ceiling, following the withdrawal of pandemic-era regulatory forbearance. Despite the spike, liquidity averaged 65% (vs. 30% minimum) and capital adequacy stood at 11.60% (above 10% threshold), ensuring stability. The regulator flagged rising credit risk and urged stronger recoveries via the Global Standing Instruction (GSI) framework, while recapitalization efforts aim to bolster resilience. Analysts warn elevated NPLs could weigh on profitability and lending capacity if risk discipline weakens.
Private Sector Credit Rebounds to ₦74.63trillion in November 2025 After Rate Cut
Credit to Nigeria’s private sector rose to ₦74.63trillion in November 2025, up ₦220billion from October, signaling early recovery after the CBN’s September rate cut to 27%. Despite the monthly uptick, credit remains below ₦75.96trillion in November 2024, reflecting lingering effects of tight monetary policy. Total domestic credit also climbed to ₦100.98trillion from ₦99.20trillion, though still far from ₦115.58trillion a year earlier. The trend suggests cautious optimism for improved lending conditions heading into 2026, contingent on inflation easing and supportive policy rates.
Next week, we anticipate cautiously sentiments as Investors await for Q4 GDP release, with inflation projected to go lower.
EUROBOND MARKET
African Eurobonds traded mildly bullish this week, supported by steady demand from oil-producing credits amid stable commodity prices. Nigerian sovereign yields compressed across key maturities, driving an 8bps w/w decline in the average benchmark yield to 7.00%, with notable interest in mid-curve bonds. Market sentiment was underpinned by resilient global risk appetite and positioning ahead of the new year, while liquidity remained balanced across major African credits.
We expect sustained buying interest in high-yield African Eurobonds next week, aided by firm oil prices and supportive technicals, though activity may remain moderate as Investors await fresh macro signals.
ALTERNATIVE ASSETS
GOLD
Gold extended its rally in the week, closing around $4,331 per ounce, up by 0.26%. The metal remains up about 64% year-on-year, sustaining its strongest rally. Its momentum was supported by dovish FOMC minutes hinting at potential rate cuts, ongoing geopolitical risks, and central-bank accumulation, while analysts forecast further gains into Q2 2026 with price targets in the $4,670–$4,960 range by year-end.
OIL
Oil prices were relatively flat to slightly down modestly. Brent crude dipped by about $0.10 to $60.75/bbl and WTI fell to $57.32/bbl, marking close to 3% drop over the prior month and a 22.5% plunge year-on-year. While geopolitical events (e.g., tension in the Middle East, Venezuela, and Russia–Ukraine) propped up sentiment, market focus remains on the structural global supply surplus.
ETFs
During the week, US-listed equity ETFs attracted strong inflows, reflecting continued Investor confidence in equities. Commodity ETFs, particularly those backed by gold, remained in demand and supported overall inflows into the space. Fixed-income ETFs also saw healthy allocations as Investors positioned for anticipated Federal Reserve rate cuts.
Gold should stay firm, supported by a dovish Fed outlook, with potential upside if tensions escalate. Oil is expected to trade quietly within the $60–$65 range as markets await OPEC+ guidance, though supply surprises could shift sentiment. ETF flows remain positive, driven by fixed income and commodity demand.
DOMESTIC MARKETS
SEC Unveils 2026 Agenda to Mobilize Long-Term Capital for Infrastructure
The Securities and Exchange Commission (SEC) plans to channel patient capital into roads, power, rail, housing, and agriculture in 2026, aiming to close Nigeria’s $100billion annual infrastructure gap. SEC DG Emomotimi Agama announced a strategic shift toward infrastructure bonds, municipal bonds, green bonds, REITs, and commodity-linked instruments, alongside tailored listing windows for agribusiness and SMEs. The move follows a 2025 cycle dominated by short-term commercial papers worth over ₦1.30trillion, which heightened refinancing risks. The Commission’s roadmap positions the capital market as a key engine for sustainable growth, targeting housing delivery, energy transition, and industrial revival.
MONEY MARKET AND FIXED INCOME
System liquidity opened the New year with a decline of ₦457.40billion thus, closing the week at a credit of ₦3.36trillion. Consequently, the Open Repo Rate (OPR) remained unchanged at 22.50% while the Overnight Rate (O/N) decreased this week by 8bps to 22.75%.
The Nigerian Treasury Bills (NTB) market average yield increased week-on-week by 6bps to 17.68%. The Bonds market yields closed lower this week as the average yield for short-tenor, mid-tenor and long tenor bills decreased by 1bps, 3bps and 3bps to close at 16.75%, 16.97% and 15.83% respectively.
Next week, we expect activities to kick off fully in the market with demand setting in for both the bonds and treasury bills market.
EQUITIES MARKET
The Nigerian equities market remained bullish to the close of the year with improving sentiments. The new year started on a positive note as the NGX All-Share Index and Market Capitalization appreciated by 1.92% and 2.09% to close the week at 156,492.36 and ₦99.94trillion compared to 153,539.83 and ₦97.89trillion last week.
A total turnover of 7.82 billion shares worth ₦134.47billion in 150,799 deals was traded this week by Investors on the floor of the Exchange, in contrast to a total of 2.88 billion shares valued at ₦63.83billion that exchanged hands last week in 80,229 deals.
On a sectoral basis, all sectors closed positive, with the Banking, Consumer Goods, Industrial Goods, Insurance and Oil and Gas indices increasing by 2.96%, 3.44%, 0.82%, 5.93% and 1.16% compared to previous week.
Notable gainers this week were Austin Laz & Company PLC and Aluminium Extrusion Industries PLC while E-Transact International PLC and First Holdco PLC topped the losers list.
We anticipate the bullishness in the Equities market to persist even as the market resume activities in full this New Year with fresh inflows.
CURRENCY
| (₦/$) | 02/01/2026 | 26/12/2025 | W-O-W% |
| NAFEM | 1,430.85 | 1,443.38 | -0.87% |
| Parallel | 1,480.00 | 1,480.00 | 0.00% |
TOP TRADES BY VOLUME
TICKER | TOP TRADES BY VOLUME TRADES | VOLUME | VALUE (₦’b) |
| CORNERST | 328 | 3,675,099,074 | 18.56 |
| CHAMS | 2,224 | 900,144,268 | 3.27 |
| ACCESSCORP | 7,889 | 741,336,794 | 15.53 |
| FCMB | 2,808 | 466,453,114 | 5.14 |
| ZENITHBANK | 7,043 | 155,378,880 | 9.75 |
TOP TRADES BY VALUE
| TICKER | TOP TRADES BY VALUE TRADES | VOLUME | VALUE(₦’b) |
| ARADEL | 3,695 | 33,186,329 | 22.59 |
| CORNERST | 328 | 3,675,099,074 | 18.56 |
| ACCESSCORP | 7,889 | 741,336,794 | 15.53 |
| SEPLAT | 1,684 | 2,417,080 | 13.81 |
| ZENITHBANK | 7,043 | 155,378,880 | 9.75 |
TOP GAINERS
| TOP GAINERS TICKER | OPEN | CLOSE | CHANGE | % |
| AUSTINLAZ | 3.20 | 4.67 | 1.47 | 45.94% |
| ALEX | 16.35 | 23.80 | 7.45 | 45.57% |
| EUNISELL | 87.95 | 126.00 | 38.05 | 43.26% |
| ABCTRANS | 3.27 | 4.51 | 1.24 | 37.92% |
| HONYFLOUR | 17.75 | 23.00 | 5.25 | 29.58% |
TOP LOSERS
| TICKER | OPEN | CLOSE | CHANGE | % |
| E-TRANZACT | 12.60 | 11.35 | -1.25 | -9.92% |
| FIRSTHOLDCO | 53.00 | 48.80 | -4.20 | -7.92% |
| LIVINGTRUST | 3.68 | 3.40 | -0.28 | -7.61% |
| CAP | 74.00 | 69.00 | -5.00 | -6.76% |
| CHAMPION | 15.00 | 14.00 | -1.00 | -6.67% |
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