Global Economy
According to the Bureau of Labour Statistics, total non-farm payroll employment in the US increased by 115,000 jobs in April, from the revised addition of 185,000 in March, and well above market expectations of an additional 62,000 jobs. Most notably, the job gains were largely driven by higher employment in healthcare (+37,000), which was above its 12-month average of +32,000 jobs. Additional job gains were also recorded in transportation and warehousing (+30,000), reflecting gains in couriers and messengers.
Likewise, employment in retail trade (+22,000) improved as gains in warehouse clubs and supercenters more than offset the decline in department stores & electronics and appliance retailers. On the other hand, the most notable job losses were recorded in information (-13,000), which continued its downward trend, and financial services (-11,000). Meanwhile, federal government employment continued its descent, falling by an additional 9,000 jobs in April, bringing the cumulative job losses to 348,000 since October 2024. Elsewhere, the broad-based unemployment rate steadied at 4.3% m/m (March: 4.3% m/m), while the labour force participation rate moderated slightly to 61.8% m/m (March: 61.9% m/m).
Although hiring recorded in April was slower than in March, the data marked the first consecutive monthly increase in employment in almost a year, suggesting that the US labour market remains resilient. Given that layoffs remain relatively contained and broader economic activity continues to expand, we expect labour market conditions to remain broadly stable in the near term, reinforcing the Federal Reserve’s cautious, wait-and-see approach at its next policy meeting.
According to data from S&P Global, the UK composite PMI remained in positive territory, expanding to 52.60 points in April (March: 50.30 points). This reading is well above market expectations of 49.80 points for the month, reflecting strong activity in the UK’s private sector. The higher-than-expected reading was attributed to stronger expansions across manufacturing and services activities. More specifically, the manufacturing PMI rose to a 47-month high of 53.70 points (March: 51.00 points), driven by stronger inflows of new orders, clearing of backlogs, and a modest increase in finished goods inventories.
Similarly, the services PMI expanded to 52.70 points (March: 50.50 points) following the heightened global demand for technology services, which offset the lower intake of new orders caused by supply shortages and elevated borrowing costs. Meanwhile, employment declined for the 19th consecutive month, with firms attributing the fall to higher National Insurance contributions.
Despite the improvements across manufacturing and services output recorded in April, we expect UK private sector activity to moderate as new business intakes remained subdued in comparison to the start of 2026. In addition, higher energy costs and supply disruptions associated with the persistent geopolitical tensions in the Middle East have tempered overall business optimism and could further lower business activity.
Global Markets
Risk appetite returned to the global equities markets this week, as investors looked past mixed signals surrounding the US-Iran conflict and responded positively to strong corporate earnings postings from major technology companies, reinforcing optimism around artificial intelligence driven growth. At the time of writing, major US indices (DJIA: +0.2%; S&P 500: +1.5%; NASDAQ: +2.8%) were on track to close the week higher, as investor attention shifted towards earnings, with a series of strong corporate earnings releases and outlooks, particularly from AI and technology-related companies, lifting sentiment during the week.
Market participants also reacted positively to stronger-than-expected labour market data, reinforcing confidence in the resilience of the US economy. Meanwhile, European equities (STOXX Europe 600: -0.1%; FTSE 100: -1.7%) are set to close lower for the third consecutive week, as prolonged tensions in the Middle East continued to fuel concerns around energy-driven inflation and its implications for the region’s economic outlook.
Elsewhere, Asian equities (Nikkei 225: +5.4%; SSE: +1.6%) closed the holiday shortened week higher, largely buoyed by gains in tech stocks, as an AI-driven rally swept across Asian markets. Finally, Emerging and Frontier Markets (MSCI EM: +7.6%; MSCI FM: +2.1%) indices advanced, driven by gains in China (+1.7%) and Romania (+4.7%), respectively.
Domestic Economy
Based on Financial Markets Dealers Quotations (FMDQ) data, total inflows into the Nigerian Foreign Exchange Market (NFEM) declined by 30.1% m/m to USD2.86 billion in April 2026 (March: USD4.09 billion), reflecting weaker inflows from both local and foreign sources. Local inflows, which accounted for 42.8% of total inflows, fell by 38.7% m/m to USD1.22 billion in the month (March: USD2.00 billion). This decline is occasioned by sharp reduction across key sources, including the CBN (-83.0% m/m), exporters/importers (-19.3% m/m), non-bank corporates (-18.2% m/m) and individuals (-33.3% m/m).
Similarly, foreign inflows, which accounted for 57.2% of total inflows, declined by 21.9% m/m to USD1.63 billion (March: USD2.09 billion), driven by lower inflows from FPIs (-17.8% m/m), FDIs (-78.9% m/m), and other corporates (-54.6% m/m). Looking ahead, we expect inflows from both domestic and foreign sources to remain resilient, supported by sustained market confidence and still attractive carry trade opportunities. However, lingering geopolitical tensions could keep foreign investors cautious, potentially moderating the pace of foreign inflows, which remains an important driver of Nigeria’s foreign exchange market liquidity.
According to data obtained from the Nigerian Communications Commission (NCC), active telephony subscriptions sustained their recovery in March, rising by 0.6% m/m to 185.72 million (February: 184.60 million). The improvement reflects continued normalisation of the subscriber base towards pre-NIN-SIM linkage levels, aided by operators’ deliberate efforts to reactivate disconnected lines, deepen market penetration, and strengthen customer retention.
Similarly, internet subscriptions increased by 0.5% m/m to 153.82 million in March (February: 153.13 million). On a year-on-year basis, active telephony subscriptions expanded by 7.5% (March 2025: 172.71 million), while internet subscriptions rose by 8.3% (March 2025: 142.05 million), underscoring the continued recovery in telecoms activity and sustained demand for connectivity. By market share, MTN Nigeria retained its dominant position with 51.6% of total active telephony subscriptions, equivalent to 95.76 million subscribers. Airtel Nigeria followed with 34.3% or 63.63 million subscribers, while Globacom accounted for 12.2% or 22.64 million subscribers. T2, formerly 9mobile, remained the smallest operator by subscriber share, with 1.9% or 3.48 million subscribers.
Looking ahead, we expect the subscriber base to sustain its gradual recovery, supported primarily by stronger growth from the two dominant operators, MTN Nigeria and Airtel Nigeria. In our view, the near-term expansion will be driven by deliberate commercial initiatives, including targeted SIM reactivation, improved subscriber retention, stronger customer engagement, enhanced distribution efficiency, and continued investment in network coverage. While Nigeria’s favourable demographics remain supportive, we believe operator-led acquisition and retention strategies will be the more immediate drivers of subscriber growth.
Capital Markets: Equities
The Nigerian equities market traded with mixed sentiments this week but ultimately closed on a positive note, as investors digested the last batch of Q1-26 corporate earnings releases. Precisely, gains in DANGCEM (+12.2%), AIRTELAFRI (+10.0%), and BUACEMENT (+2.4%) outweighed sell pressures in MTNN (-12.5%), WAPCO (-5.7%), and GUINNESS (-19.0%), lifting the All-Share Index by 1.0% w/w to 244,775.83 points.
Consequently, the month-to-date and year-to-date returns settled at +1.0% and +57.3%, respectively. On market participation, trading volume and value increased by 69.8% w/w and 28.0% w/w, respectively. Sectoral performance was mixed, as the Industrial Goods (+5.1%), Insurance (+4.0%), Banking (+1.9%) and Consumer Goods (+1.8%) indices advanced, while the Oil & Gas (-3.3%) index declined.
Looking ahead, we expect trading to remain largely cautious next week in the absence of any significant positive catalyst to drive market sentiment. Selective buying interest is likely to be balanced by profit-taking activities.
Money Market and Fixed Income
The OVN rate contracted by 11bps w/w to 22.2%, primarily supported by inflows from OMO maturities (NGN2.71 trillion). Consequently, system liquidity strengthened to an average net long position of NGN5.62 trillion, up from NGN5.33 trillion in the prior week.
In the absence of any mop-up operations by the CBN, system liquidity is expected to remain strong next week, bolstered by inflows from OMO maturities (NGN2.07 trillion) and FGN bond coupon payments (NGN303.72 billion). Consequently, OVN rates are likely to remain subdued.
Treasury Bills
The Treasury bills secondary market traded on a bullish note supported by robust system liquidity. Consequently, average yields declined by 5bps to 18.8%. Across segments, the NTB secondary market traded on a bearish note as investors unwound positions to participate in Wednesday’s NTB PMA. Conversely, yields in the OMO secondary market contracted by 8bps to 21.0%.
At Wednesday’s NTB PMA, the DMO offered NGN700.00 billion across tenors, with total demand reaching NGN2.41 trillion, translating to a bid-to-offer ratio of 3.4x. The DMO ultimately allotted NGN731.75 billion, implying a bid-to-cover ratio of 3.3x. Stop rates settled at 15.95%, 16.14% and 16.15% for the 91-, 182- and 364-day tenors, respectively. At Monday’s OMO auction, the CBN offered NGN600.00 billion across the 8- and 134-day tenors, attracting strong demand with total subscriptions of NGN1.71 trillion.
The CBN subsequently allotted NGN1.70 trillion across the tenors at stop rates of 21.90% and 20.00%, respectively. Similarly, at Thursday’s OMO auction, the CBN offered NGN600.00 billion across the 33-, 75-, and 96-day tenors. Demand remained robust as aggregate subscriptions came in at NGN1.64 trillion, with the CBN eventually allotting NGN1.60 trillion at stop rates of 21.57%, 20.63%, and 20.45%, respectively.
Next week, we expect strong system liquidity and the significant unmet bids observed at the last NTB auction (bid-to-cover: 3.3x vs. bid-to-offer: 3.4x) to bolster buying interest in the Treasury bills secondary market, keeping yields under downward pressure.
Bonds
The FGN bond secondary market traded on a quiet note albeit with a bearish undertone, with the average yield expanding by 1bp to 16.1%. Across the benchmark curve, the average yield expanded at the short (+12bps) end, driven by selloffs of the MAR-2028 (+32bps) bond. Conversely, the average yield contracted at the mid (-2bps) and long (-1bp) segments, driven by demand for the APR-2029 (-14bps) and JUN-2038 (-11bps) bonds, respectively.
Over the medium term, yields are expected to moderate further, largely supported by strong domestic liquidity. However, the pace of decline could be limited by continued risk-off sentiment, especially from offshore investors, as well as the government’s elevated borrowing programme.
Foreign Exchange
The naira appreciated by 1.2% w/w to NGN1,360.00/USD, as inflows from offshore investors offset local demand. Meanwhile, gross external reserves declined by USD40.00 million to USD48.33 billion (7 May 2026), marking the eighth consecutive week of decline. In the forwards market, the naira rates appreciated across the 1-month (+1.2% to NGN1,384.53/USD), 3-month (+1.2% to NGN1,424.08/USD), 6-month (+1.3% to NGN1,478.39/USD) and 1-year (+1.5% to NGN1,586.56/USD) contracts.
The naira is expected to hold steady in the near term, although downside risk persists. Despite heightened investor caution stemming from the ongoing US–Iran conflict, a relatively supportive external backdrop and elevated naira yields should continue to underpin foreign portfolio inflows, albeit at a slower pace compared to pre-conflict levels. Nonetheless, should demand pressures re-emerge, we expect the CBN to undertake measured FX interventions to contain excessive volatility.
Cordros
