Global Macroeconomic Review
August saw global economic conditions diverge, with weaker U.S. labour data strengthening expectations of a September rate cut. July non-farm payrolls fell by 23,000, against expectations of an 80,000 increase, while headline inflation eased to 3.4% y/y and wage growth slowed to 3.2%. In Europe, UK inflation accelerated to 2.9%, while Eurozone inflation rose to 2.9% despite manufacturing activity reaching its strongest level since May 2022. China’s slowdown deepened as industrial output, retail sales and fixed-asset investment weakened, while volatile Middle East supply conditions pushed Brent crude from about $79/bbl early in August to roughly $90.50/bbl at month-end.
Domestic Macroeconomic Review
Nigeria’s headline inflation eased for a second consecutive month in July, signalling a renewed—though uneven—disinflation trend. Headline inflation declined to 15.43% y/y from 15.91% in June and 24.94% in July 2025, while monthly inflation moderated to 1.57%. Core inflation fell more sharply to 14.97%, but food inflation accelerated to 20.31% from 17.52%, indicating that household cost pressures remained elevated despite the improving headline figure.
Market Update
Financial markets in August were shaped by abundant liquidity, improved external-sector conditions, and selective investor demand. The naira appreciated by 2.58% to ₦1,332.94/$ at the NFEM, supported by stronger FX turnover and external reserves rising to a 17-year high of $53.11 billion. Average system liquidity increased to ₦4.63 trillion, while demand remained concentrated in longer-dated Treasury bills, with the 364-day stop rate closing at 20.69%. Average FGN bond yields declined by approximately 26bps to 16.83%, while sovereign Eurobond yields eased by about 4bps to 6.96%. Equities recorded a modest correction, with the NGX All-Share Index declining 0.44% to 244,199.39 points and market capitalization closing at ₦157.74 trillion.
