MoneyAfrica| Investment Research
Weekly Market Commentary
July 20, 2026.
Good morning, readers, and welcome to this week’s edition of our stock market newsletter!
As always, our newsletter is divided into two sections: Green White Green, covering the Nigerian stock market, and the Star-Spangled Banner, focusing on the US market.
Macro Update
Inflation Edges Down to 15.91% in June 2026
Nigeria’s headline inflation rate eased marginally to 15.91% year-on-year in June 2026, down from 15.93% in May, the first decline in three months. While still elevated, this is significantly lower than the 25.29% recorded in June 2025, reflecting the progress made over the past year. Month-on-month headline inflation also slowed to 1.66% from 1.75% in May, meaning consumer prices are still rising but at a slower pace.
The moderation in headline inflation was driven entirely by a sharp easing in core inflation, which fell to 15.92% year-on-year from 16.82% in May. On a month-on-month basis, core inflation dropped to 1.66% from 1.94%. The key drivers were lower logistics costs following domestic petrol price cuts and reduced global crude oil prices, alongside naira stability which eased imported inflation on non-food, non-energy goods.
Food and energy told a different story. Year-on-year food inflation rose to 17.52% from 17.43% in May, while month-on-month food inflation surged to 3.75% from 2.98%, the sharpest monthly acceleration this year. Energy prices also continued to exert upward pressure on the headline index, offsetting some of the core inflation relief.
Looking ahead, renewed US military action against Iran last week threatens to push global energy prices higher, which would feed into Nigeria’s transport and logistics costs, the same channel that helped cool core inflation in June. If energy costs rise, both headline and food inflation could face renewed upward pressure in July.
The CBN is unlikely to cut interest rates until food price pressures show a more sustained and convincing decline.
Key Takeaway:
- The headline dip masks two opposing forces: core inflation cooling sharply on the back of naira stability and lower logistics costs, while food inflation is accelerating at its fastest monthly pace this year. Renewed Middle East escalation threatening energy prices means the core inflation relief seen in June may not last into July. The CBN is unlikely to cut interest rates until food price pressures show a more sustained and convincing decline.
FX Update
Naira Holds Steady as Reserves Approach $52 Billion
The naira was largely stable in the official market last week, closing at ₦1,380.18/$, a marginal weakening of ₦0.56 from ₦1,379.62/$ the previous week. In the parallel market, the naira weakened to ₦1,413/$ from ₦1,400/$ the previous week, a depreciation of ₦13.
The parallel market premium widened to ₦32.82 (2.38%), up from ₦20.38 (1.48%) the previous week. The gap between the two markets is reopening again, driven by renewed demand pressure in the informal market.
External reserves climbed to $51.915 billion as of July 17, up from $51.743 billion the previous week, supported by stronger crude oil export earnings and steady foreign portfolio inflows. The CBN Governor also announced a target to reach $1 billion in monthly diaspora remittances by the end of 2026.
Official remittance inflows have already tripled from $200 million to over $600 million per month since the CBN’s FX reforms began in late 2023, a 200% increase achieved within months of harmonising exchange rates and eliminating multiple rate windows.
Key Takeaway:
- Reserves continue their steady climb toward $52 billion, but the parallel market premium widening to 2.38% signals growing dollar demand outside the official market. When more people turn to the parallel market for dollars, it typically means the official market is not fully meeting demand and if the gap keeps widening, it puts downward pressure on the naira.
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Equities Update
NGX Holds Steady as Banking Surge Offsets Industrial Selloff
The NGX All-Share Index declined marginally by 0.14% last week, pulling the year-to-date return slightly down to 56.45% from 56.67% the previous week. The week was defined by sharp volatility; a steep Monday selloff that wiped ₦1.32 trillion in market value was partially recovered by an aggressive banking-led rally on Friday that added ₦849 billion.
Sector performance was sharply divided. Banking was the standout gainer, surging 9.30% and bringing its year-to-date return to 54.96% driven by institutional buying of undervalued tier-1 stocks. First HoldCo led the week’s gainers, closing at a 52-week high of ₦95.95 per share. Insurance was nearly flat, gaining 0.25%, remaining the only sector in negative territory for the year at -4.50%.
However, Industrial Goods bore the heaviest losses, falling 6.26% and pulling its year-to-date return down to 76.91%. Oil and Gas slipped 0.11%, now up 96.59% for the year. Consumer Goods edged down 0.15%, now up 17.84% for the year.
Key Takeaway:
- The market ended marginally lower as early-week selling in Industrial Goods heavyweights outweighed Friday’s banking recovery. The week illustrated a market in active rotation, money moving out of Industrial Goods and into Banking, where valuations look more attractive after recent corrections.
CBN Holds Two T-Bill Auctions in One Week to Absorb Maturing OMO Inflows
The CBN held two consecutive T-bill auctions last week July 8 and July 15 to absorb ₦2.21 trillion in maturing OMO bills that hit the banking system on July 7. Across both auctions, the CBN offered a combined ₦1.3 trillion, attracted ₦5.06 trillion in total subscriptions, and allotted ₦2.25 trillion effectively neutralising the full liquidity injection. Stop rates held broadly stable across both auctions. The 91-day and 182-day rates were unchanged at 16.30% and 16.50% respectively, while the 364-day rate dipped marginally from 17.70% at the July 8 auction to 17.66% at the July 15 auction suggesting that the additional supply slightly eased demand pressure at the long end.
T-bill yields were broadly stable. The 90-day yield edged down to 16.46% from 16.51% the previous week, the 180-day rose to 18.06% from 17.97%, and the 364-day held nearly flat at 20.90% from 20.91%. OMO bills yielded between 20.68% on the January 2027 paper and 21.58% on the September 2026 paper.
The average benchmark bond yield eased to 17.45% ⁸17.77% the previous week. The DMO also announced a bond auction scheduled for July 20, targeting ₦1.2 trillion across three reopened instruments the 10-year (Jan 2035), 15-year (Jun 2038), and 20-year (Apr 2037) bonds at ₦400 billion each. Market participants expect clearing rates between 18.50% and 18.60%.
Key Takeaway:
- The CBN absorbed the liquidity surge from maturing OMO bills without disrupting yields. The July 20 bond auction will be the next key test of how much yield investors demand for longer-term government debt.
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Star-Spangled Banner
US Inflation Cools to 3.5% but Middle East Escalation Sends Oil Back to $81
The week’s biggest positive development was the US inflation report released on Tuesday July 14. Headline CPI cooled sharply to 3.5% year-on-year in June, down from 3.9% in May, as falling energy prices offset earlier spikes from Middle East supply disruptions.
- Core CPI, which strips out food and energy, also eased to 2.6% from 2.8%, with month-on-month core inflation flat at 0.0%. Before the report, markets were pricing in a roughly 40% probability of a Fed rate hike at the July meeting. The softer-than-expected data collapsed that probability to around 15% effectively taking a near-term hike off the table and sending relief through bond markets.
However, renewed US-Iran hostilities and fresh Strait of Hormuz disruptions pushed oil prices back up to around $81/barrel by the end of the week. Since falling energy prices were the primary driver of June’s inflation cooldown, a sustained oil price rebound directly threatens to reverse that progress in July’s reading.
Tech and semiconductor stocks bore the brunt of the selloff. The Nasdaq dropped 2.90% for the week, now at 9.80% year-to-date, and the S&P 500 fell 1.55%, now at 8.94% year-to-date. The Dow declined 0.93%, now at 8.50% year-to-date. The MSCI World Index slipped 0.59%, now at 8.16% year-to-date. Japan’s Nikkei led global losses, falling 4.61%, now at 27.42% year-to-date hit hard by the global semiconductor selloff given Japan’s heavy tech exposure.
Europe was more resilient. The FTSE 100 gained 0.98%, now at 6.74% year-to-date, benefiting from lower tech exposure and a surge in energy stocks. France’s CAC 40 slipped marginally by 0.31%, now at 2.32% year-to-date.
Key Takeaway:
- US inflation cooling to 3.5% is the most encouraging macro development in months, cutting the probability of a Fed rate hike from 40% to just 15%. But the same Middle East tensions that drove inflation higher earlier this year are pushing oil prices up again and if that continues, July’s inflation reading could quickly undo June’s progress.
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We hope you find this edition insightful, and as always, stay focused on your financial goals!