Global Economy
The Bank of England (BoE), at its November policy meeting, voted by a narrow 5–4 majority to keep the Bank Rate unchanged for the third consecutive time at 4.00%. Notably, four members supported a 25bps cut to 3.75% (previous: two), signalling growing support for policy easing.
The Committee acknowledged that GDP growth remains subdued amid softer labour market conditions and below-trend output. It also noted that inflation has likely peaked, with disinflationary pressures emerging on the back of moderating wage growth, easing services inflation, and an already restrictive policy stance. In its forward guidance, the Committee stressed that the timing and scale of eventual rate cuts remain foggy but added that the risks around achieving the 2.0% target are now more evenly balanced.
The BoE is likely to maintain a cautiously dovish tone at its December policy meeting. With inflation past its peak, growth momentum subdued, and the November vote signalling a broader tilt toward easing, market expectations have strengthened around a 25bps rate cut to 3.75%. While policymakers continue to stress data dependence and the need for inflation to return sustainably to target, the balance of risks now leans toward gradual policy easing. Accordingly, we anticipate that the Bank of England will implement a 25bps cut at its December 18 policy meeting.
Based on the recently released data from S&P Global, the United States (US) Composite PMI rose to 54.60 points in October (September: 53.90 points), marginally below market expectations of 54.80 points. The uptick reflects broad-based improvements across manufacturing and services sectors heading into the fourth quarter of the year. Specifically, the Manufacturing PMI edged up to 52.50 points (September: 54.20 points), signalling a modest recovery despite lingering tariff pressures, while the Services PMI strengthened to 54.80 points (September: 53.90 points) on solid new business inflows. Specifically, employment levels increased for the eighth consecutive month, though gains remained modest amid elevated labour costs.
Meanwhile, inflationary pressures eased slightly, as both input costs and output prices increased at their slowest rate in seven months. Overall, the data indicate that U.S. growth momentum is stabilizing, supported by resilient domestic demand and steady business activity, even as policy uncertainties and soft business confidence temper the pace of recovery. Looking ahead, US private sector activity is expected to remain on an expansionary path, supported by firm domestic demand and prospects of a more accommodative policy stance. Nonetheless, lingering cost pressures and trade policy uncertainty could cap business confidence and moderate the pace of growth.
Global Market
Risk-off sentiment dominated the global equities markets this week as investors grappled with mounting concerns over stretched valuations in technology and AI sectors, uneven corporate earnings, and mixed macroeconomic data. At the time of writing, US equities (S&P 500: -1.5%; DJIA: -1.3%) were on track to end the week lower as persistent anxiety about lofty AI valuations and uncertainty surrounding the Federal Reserve’s next policy move weighed on sentiments. Market performance was further dampened by signs of labour-market weakness, after data showed US employers announced 153,074 job cuts in October 2025.
European equities (STOXX 600: -1.2%; FTSE 100: -0.2%) also pared, pressured by similar concerns over AI valuations, tepid earnings releases, and mixed investor reactions to the Bank of England’s policy decision. In Asia, performance was mixed as Japanese stocks (Nikkei 225: -4.1%) declined, tracking a tech-led selloff on Wall Street, while Chinese equities (SSE: +1.1%) advanced, after authorities directed that new state-funded data centre projects must use domestically produced AI chips, bolstering sentiment toward local semiconductor names. Meanwhile, the MSCI Emerging and Frontier Markets (MSCI EM: -1.6%; MSCI FM: -0.6%) indices retreated, reflecting losses in India (-1.2%) and Vietnam (-3.0%), respectively.
Domestic Economy
According to data from FMDQ, total inflows into the Nigerian Foreign Exchange Market (NFEM) rose sharply by 62.2% m/m to USD5.15 billion in October (September: USD3.18 billion), marking the highest level in five months. The surge reflected strong participation from both foreign and domestic investors, supported by improving market sentiment and the global shift toward monetary policy easing.
Foreign inflows—which accounted for 64.5% of the total—soared by 89.7% m/m to USD3.32 billion (September: USD1.75 billion), driven mainly by a rebound in Foreign Portfolio Investment (FPI) inflows (+120.7% m/m) and higher receipts from the Other Corporate segment (+30.5% m/m), offsetting the decline in Foreign Direct Investment (FDI) inflows (-25.5% m/m).
At the same time, domestic inflows (35.5% of total inflows) expanded by 28.4% m/m, propelled by a surge in individual contributions (+370.6% m/m) and higher inflows from Other Corporates (+30.8% m/m) and Exporters (+7.2% m/m), amid a steep drop in CBN inflows (-59.6% m/m). Looking ahead, we expect total foreign exchange inflows from both domestic and foreign sources to remain robust, surpassing the 2024 average level (USD2.51 billion), driven by sustained market confidence and still-attractive carry-trade opportunities.
According to data from the Domestic and Foreign Portfolio Investment (FPI) Report of the Nigerian Exchange (NGX), total transactions in the local bourse surged by 78.5% m/m to NGN1.62 trillion in September (August: NGN908.38 billion). The upswing reflected increased participation from both domestic (76.1% of total transactions) and foreign (23.9%) investors. A closer look at the breakdown shows that domestic investors’ inflows rose markedly by 67.5% m/m to NGN1.23 trillion (August: NGN736.60 billion), driven primarily by a 143.1% m/m surge in institutional transactions, reflecting large block trades, which more than offset the decline in retail activity (-18.9% m/m).
Similarly, foreign inflows increased by 125.6% m/m to NGN387.62 billion (August: NGN171.80 billion), buoyed by moderating fixed income yields and improving market sentiment, which strengthened foreign demand for Nigerian equities. However, net outflows rose modestly by 5.0% m/m to NGN3.15 billion (August: NGN3.00 billion), as higher net domestic outflows (NGN266.45 billion) slightly outweighed net foreign inflows (NGN263.30 billion). Looking ahead, we expect domestic investors to remain the dominant drivers of market turnover, supported by the continued decline in fixed income yields, which should sustain rotation into equities. In addition, relative naira stability and improving macroeconomic conditions are likely to strengthen foreign investor confidence and support renewed participation in the local market over the near term.
Capital Markets: Equities
The Nigerian equities market opened November on a bearish note, closing lower in all five trading sessions of the week. The downturn reflected a mix of profit-taking activities, investor caution amid recent Nigeria–US diplomatic strains, and reallocation of capital to the fixed income market. Specifically, the All-Share Index (ASI) fell by 3.0% w/w to 149,524.81 points, dragged by notable selloffs in MTNN (-8.3%), BUACEMENT (-8.3%), TRANSCORP (-12.0%), BUAFOODS (-1.8%), NESTLE (-9.7%) and WAPCO (-6.4%).
As a result, the year-to-date returns moderated to +45.3%. On market activity, trading volume and value declined by 52.2% w/w and 26.4% w/w, respectively. Meanwhile, sectoral performance was broadly negative, as the Insurance (-7.6%), Oil & Gas (-4.8%), Banking (-3.9%), Consumer Goods (-2.5%), and Industrial Goods (-1.1%) indices all closed lower.
Looking ahead, we expect market performance to remain subdued in the near term as investors continue to monitor ongoing diplomatic developments. Nonetheless, we do not rule out selective bargain-hunting in fundamentally sound, beaten-down names, as investors take advantage of attractive entry points.
Money Market and Fixed Income
In line with expectations, NGN1.45 trillion in OMO maturities flowed into the system this week, boosting overall liquidity. The CBN intervened to sterilize excess funds, mopping up NGN273.60 billion through open market operations. Nonetheless, given the modest scale of outflows, system liquidity remained robust at a net long position of NGN4.39 trillion (Previous: NGN3.37 trillion), with the OVN rate broadly unchanged at 24.9%.
Barring any liquidity tightening measures by the CBN in the coming week, system liquidity is expected to remain ample, keeping the OVN rate anchored around current levels.
Treasury Bills
The Treasury bills secondary market traded with mixed sentiments across instruments. Bullish activity dominated the NTB segment as investors sought to fill unmet bids from the primary auction. Conversely, the OMO curve witnessed mild selloffs, driven by investor jitters following President Trump’s recent comments on Nigeria’s security situation. Consequently, the average yield across all instruments advanced by 3bps w/w to 19.7%.
By segment, NTB yields fell by 7bps to 17.4%, while OMO yields rose by 15bps to 22.2%. At Wednesday’s NTB auction, the CBN offered bills worth NGN650.00 billion – NGN100.00 billion for the 91D, NGN100.00 billion for the 182D, and NGN450.00 billion for the 364D bills. Total subscription increased to NGN1.18 trillion (Previous auction: NGN750.91 billion), indicating a bid-to-offer ratio of 1.8x (Previous auction: 1.2x). The auction closed with the CBN allotting NGN546.34 billion – NGN31.18 billion for the 91D, NGN10.29 billion for the 182D, and NGN504.87 billion for the 364D papers – at respective stop rates of 15.30% (unchanged), 15.50% (unchanged) and 16.04% (previous: 16.14%).
Additionally, the CBN conducted an OMO auction, offering NGN600.00 billion worth of bills. Total subscriptions reached NGN1.18 trillion, representing a bid-to-offer ratio of 2.0x. Eventually, the CBN sold only NGN273.60 billion, with stop rates of 21.69% and 21.84% on the 56D and 84D maturities, respectively.
Given our expectation of sustained system liquidity, we anticipate stronger demand for Treasury bills, which should exert mild downward pressure on yields.
Bonds
The FGN bond secondary market traded with bullish sentiments driven by demand from portfolio managers. Consequently, the average yield declined by 12bps w/w to 15.8%. Across the curve, the average yield decreased at the short (-16bps) and mid (-17bps) segments following demand for the JAN-2026 (-40bps) and JUL-2034 (-44bps) bonds, respectively, while it closed flat at the long end.
We expect the robust liquidity position to sustain demand for bonds, exerting mild downward pressure on yields.
Foreign Exchange
The naira depreciated this week by 0.2% w/w to NGN1,441.89/USD, amid the USD50.00 million intervention from the CBN. Meanwhile, gross FX reserves increased for the seventeenth consecutive week, growing by USD153.75 million w/w to USD43.30 billion (November 5). In the forwards market, the naira rates depreciated across the 1-month (-0.6% to NGN1,467.66/USD), 3-month (-0.7% to NGN1,517.95/USD), 6-month (-0.8% to NGN1,588.99/USD) and 1-year (-1.0% to NGN1,724.16/USD) contracts.
We maintain a constructive outlook on the Naira, supported by sustained FX liquidity and renewed investor confidence. The recent USD2.35 billion Eurobond issuance underscores improved market access and sentiment, while providing a boost to FX reserves. Domestically, rising non-oil export receipts and ongoing FX market reforms should sustain inflows, while stronger reserves, a positive current account position, and the global shift toward monetary easing are expected to anchor near-term FX stability and support a firmer Naira trajectory.
Cordros
