Weekly Market Insights: Global Trends and Local Implications
- Global financial conditions continue to favour easier policy settings, as sustained disinflation and policy signalling across advanced and emerging economies reinforce expectations of a softer global rate environment into 2026.
- While Nigeria is unlikely to move aggressively in the near term, the external backdrop increasingly supports a gradual domestic policy recalibration.
- Crude oil fundamentals remain fragile, with expanding non-OPEC+ production and easing geopolitical risk keeping supply-side pressures elevated.
- This environment limits upside for oil prices and continues to constrain Nigeria’s oil revenue outlook and FX inflows.
- The naira showed relative stability in early January, averaging N1,423.39 in the first trading week, supported OMO sales, increase in foreign reserves, and other autonomous inflows.
- Liquidity conditions are expected to be more balanced this week, as lower OMO maturities moderate system inflows.
- Total estimated inflows of about N821.65 billion represent a sharp slowdown from prior weeks, suggesting reduced pressure on FX demand and more stable interbank funding conditions.
- In fixed income markets, yields remain elevated but are increasingly driven by liquidity dynamics rather than policy expectations, reinforcing a cautious stance among investors as markets await clearer signals on the timing of easing.
- Equities continue its positive momentum, with the NGX All-Share Index posting 3.71% WoW gains, while year-to-date return stood at 4.3%.
