Global Macroeconomic Review

July saw weaker global growth alongside mixed inflation signals. U.S. Q2 GDP slowed to 1.5% annualized, while headline inflation eased to 3.5% and the Federal Reserve maintained its policy rate at 3.50%–3.75% amid softer payroll growth. UK inflation moderated to 2.6%, although the Bank of England held its rate at 3.75%, while Eurozone growth recovered by 0.4% q/q despite July inflation rising to 2.9%…

Domestic Macroeconomic Review

Nigeria’s headline inflation eased marginally to 15.91% y/y in June, from 15.93% in May, ending three consecutive months of increases; month-on-month inflation also slowed to 1.66% from 1.75%. Food inflation nevertheless accelerated to 17.52% y/y, while core inflation stood at 15.92%, indicating that underlying price pressures remained significant. Economic activity improved modestly, with the composite PMI rising to 50.1 points from 49.6, driven by agriculture at 52.1, while industry and services remained in contraction at 49.5 and 49.4, respectively. Business confidence declined for a fourth consecutive month, and consumers remained cautious about prevailing economic conditions and major purchases.

Market Update

Financial markets in July were supported by surplus liquidity, stronger external buffers, and renewed investor demand. The naira appreciated by 0.83% to ₦1,368.22/$ at NAFEM, although the parallel-market rate weakened by 1.44% to ₦1,405/$. External reserves increased to $52.52 billion by 17 July, supported by stronger oil-related inflows. Average system liquidity remained robust at ₦3.92 trillion, despite CRR debits and significant primary-market issuance. Treasury-bill yields declined 48bps to 18.23%, while average FGN bond yields fell 71bps to 17.08% as investors deployed excess liquidity into government securities. Nigerian Eurobond yields compressed by 10bps to 6.97%, led by shorter- and medium-dated maturities. Equities rebounded 6.92%, lifting the NGX ASI to 245,283.68 points and extending its year-to-date return to 57.60%, with banking stocks leading the recovery.