Last week, markets were forced to confront a simple reality: the path to lower interest rates may not be as close as investors had hoped. 

In the U.S., inflation stopped declining and held steady, complicating expectations of rate cuts. In China, price pressures picked up again, hinting at a return of demand. Across African markets, Eurobond yields rose as investors demanded better compensation for risk. And in Nigeria, a mix of policy shifts and heavy fixed-income demand pushed yields higher, even as equities edged higher. 

Taken together, these moves point to a shift in sentiment. Investors are still active, but they are becoming more selective, more cautious, and far more sensitive to pricing. 

That shift is what defined the market last week. Let’s break it all down. 

Global Economy 

US: Inflation Stabilizes at Nine-Month Low

The United States delivered what investors have been hoping for over the past year: stability. 

Inflation held at 2.4% in February, unchanged from January and in line with market expectations. This marks the lowest inflation rate since May 2025. When inflation stops falling but doesn’t accelerate, it suggests price pressures have reached a level where they might stabilize rather than continuing to decline toward the Federal Reserve’s 2% target. 

Energy prices showed signs of recovery after months of declines, rising 0.5% compared to a 0.1% decline in January. Gasoline prices still fell year over year, but by less than they had been. Fuel oil prices jumped 6.2%, and natural gas climbed 10.9%. These aren’t small moves. They suggest energy markets are finding a floor after extended weakness. For consumers, it means the relief at the pump may be ending. 

Used car and truck prices fell 3.2% year-over-year, a sharper decline than the 2.0% drop the previous month. This matters because used vehicle prices surged during the pandemic and have been slowly normalizing. The accelerating decline suggests that the market is still working through excess inventory. Meanwhile, the categories that dominate household budgets showed no improvement. Food prices rose 3.1%, and shelter costs increased 3.0%, both unchanged from January. When housing and food inflation won’t budge, overall inflation can’t fall much further even if energy and goods prices cooperate. 

Core inflation, which strips out food and energy to show underlying price trends, held at 2.5% year-over-year. On a monthly basis, it rose 0.2%, easing from 0.3% the prior month. The Federal Reserve watches core inflation closely because it tends to be stickier than headline inflation. At 2.5%, it’s close to the lowest level since 2021 but still above the 2% target. That gap matters for how quickly the Fed might cut interest rates. 

China: Lunar New Year Drives Sharp Price Jump

Across the Pacific, China told a very different story. Annual inflation there jumped sharply to 1.3%, up from just 0.2% in January. This was the highest level since January 2023 and well above market expectations of 0.8%. On the surface, that looks like a sudden shift, but the spike was largely driven by seasonal demand linked to the Lunar New Year, which fell in mid-February this year. Lunar New Year is China’s biggest holiday, and spending surges as people travel, buy gifts, and feast. That temporary demand boost typically pushes prices higher. 

Food prices recorded their strongest increase since October 2024, rebounding to 1.7% year-over-year from a 0.7% decline in January. Fresh vegetable prices jumped, and pork prices fell less sharply than they had been. Pork matters enormously in China’s inflation calculations because it’s a dietary staple. When pork prices move, overall food inflation moves. The question is whether food price strength persists after the holiday effect fades or if prices moderate back toward January’s levels. 

Non-food inflation also strengthened, rising to 1.3% from 0.4% previously. Clothing, healthcare, and education all saw price increases. Transport costs declined at a slower pace while housing prices continued edging lower, though the pace of decline slightly accelerated. Core inflation, which excludes food and energy, rose 1.8% year-over-year, the strongest reading since March 2019. This suggests underlying price pressures are firming beyond just seasonal factors. 

On a monthly basis, consumer prices increased 1.0%, up from 0.2% in January and marking the largest monthly gain since February 2024. Month-over-month moves can be noisy, but a 1.0% jump in a single month catches attention. The key question for Chinese policymakers is whether this inflation acceleration represents genuine demand strength or just holiday distortion that will reverse in March. If it’s a real demand, that’s actually good news for an economy that’s been struggling with weak consumption. If it’s just calendar effects, prices could slide back down quickly. 

Sub-Saharan African Economies 

African Eurobonds showed mixed performance this week with significant divergence across countries. Nigerian and Kenyan papers weakened as investors demanded higher yields. Angolan bonds strengthened with yields falling across all maturities. Egyptian debt sold off sharply with some maturities experiencing dramatic moves. Senegalese bonds also traded lower. The divergent performance suggests investors are differentiating between countries based on individual credit fundamentals rather than treating the region as a monolithic bloc. 

Angola: Central Bank Pauses Rate Cuts 

The National Bank of Angola kept its key interest rate unchanged at 17.5% on March 12, 2026, marking the first pause following three consecutive reductions. Why? Angola’s inflation has been falling steadily since peaking at 31.1% in July 2024. By February, headline inflation had dropped to 13.35%, the lowest since July 2023. That’s dramatic progress in a relatively short period. 

The kwanza has been stable, which helps keep import prices in check. Angola’s economy grew 5.7% in the fourth quarter of 2025, the strongest expansion since mid-2023. So why pause? At 17.5%, Angola’s real interest rate (the nominal rate minus inflation) is still positive but not as high as it was when rates were at higher levels and inflation was falling faster. The central bank likely wants to see if inflation continues declining at its current pace or if it starts to level off before cutting further. 

There’s also the question of how much economic support is needed. Growth is accelerating, particularly in non-oil sectors. Cutting rates too aggressively when growth is already strong could risk reigniting inflation. Pausing allows policymakers to assess whether the economy can sustain its momentum without additional monetary stimulus. It’s a wait-and-see approach that prioritizes inflation control over maximum growth stimulus. 

Egypt: Renewed Price Pressures Desite Earlier Progress

Egypt’s annual urban inflation rate rose to 13.4% in February 2026 from 11.9% the previous month, well above market expectations of 12%. This marked the highest reading since July 2025. After months of disinflation, prices are accelerating again. That’s exactly what central banks don’t want to see because it raises questions about whether earlier progress was sustainable or temporary. 

Food and non-alcoholic beverages saw prices increase 4.6% compared to just 1.9% in January. Housing and utilities costs jumped to 31.7% from 29.8%. Clothing and footwear inflation ticked up slightly to 14.2% from 14.1%. Transport inflation held steady at 27.5%, which is still extraordinarily high. When transport costs are rising that fast, it feeds through to everything else in the economy because moving goods becomes more expensive. 

On a monthly basis, consumer prices rose 2.8% in February, accelerating from a 1.2% gain in January. This was the fastest monthly increase since February 2024. Month-to-month moves of 2.8% are significant. Annualized, that pace would put inflation back above 30%, which is why the Egyptian central bank will be watching March data very carefully. If monthly inflation stays elevated, it suggests price pressures are building rather than moderating. 

The reacceleration complicates Egypt’s monetary policy calculus. The central bank had been signalling confidence that inflation was under control. This uptick may force a reassessment of whether rate cuts are appropriate or if policy needs to stay tighter for longer to ensure inflation doesn’t escape containment. 

Domestic Economy 

Major Updates During the Week 

1. Government Halts Gasoline Import Permits 

Nigeria halted gasoline import permits this week in a move that directly benefits the Dangote refinery. For years, Nigeria imported most of its refined petroleum products despite being an oil-producing nation. Import permits allow marketers to bring in gasoline from abroad. By stopping new permits, the government is effectively forcing the market to source fuel domestically, primarily from Dangote’s 650,000-barrel-per-day refinery. 

If Dangote refinery becomes the dominant supplier of gasoline in Nigeria, it gains enormous pricing power. For consumers, this could mean a more stable supply if the refinery operates efficiently, but potentially higher prices if there’s insufficient competition. For the government, it represents a bet that local refining capacity can meet demand more reliably than imports, which depend on foreign exchange availability and global supply chains. 

The move also has currency implications. Every litre of gasoline Nigeria imports requires dollars. If domestic refining reduces import dependence, it eases pressure on foreign exchange reserves and could help stabilize the naira. But it also creates a single point of failure. If the Dangote refinery experiences operational issues or can’t meet full demand, there are now fewer alternative sources available quickly. 

2. CBN Prepares Naira Defense Measures

The Central Bank of Nigeria is preparing naira defence measures amid global tensions that are shaking emerging markets. What does this entail? Central banks defend their currencies by intervening in foreign exchange markets, selling dollars from reserves to buy naira and preventing the exchange rate from weakening too rapidly. They can also adjust interest rates to make holding naira more attractive relative to foreign currencies. 

The need for defense measures signals that the CBN sees potential pressure building on the currency. Global risk-off sentiment tends to hit emerging-market currencies hard as investors flee to safer assets such as US dollars and Treasury bonds. The naira has been relatively stable recently, but that stability required consistent CBN intervention and policy discipline. If external shocks intensify, maintaining that stability becomes more expensive and potentially unsustainable. 

For Nigerian investors, currency defense matters because exchange rate stability affects everything from import costs to the real value of naira-denominated assets. If defense measures fail and the naira weakens significantly, imported inflation accelerates, borrowing costs rise, and the purchasing power of savings erodes. The CBN’s proactive stance suggests they’re taking the threat seriously rather than waiting for pressure to build before responding. 

3. Petroleum Reform Task Force Targets Liquidity Boost

President Tinubu announced a new petroleum reform task force targeting a $10 billion liquidity boost. A $10 billion liquidity boost in petroleum could come from several sources, which include: resolving payment backlogs owed to oil producers, streamlining processes that tie up working capital, attracting new investment by reducing regulatory bottlenecks, and improving revenue collection so money flows more quickly through the system.  

For investors, petroleum sector liquidity matters because oil and gas companies are major components of the Nigerian stock market. When these companies have better access to capital, they can invest in production, pay dividends more reliably, and grow their operations. For the broader economy, a more liquid petroleum sector means more stable oil production, higher government revenues, and less pressure on foreign exchange reserves. Whether a task force can actually deliver a $10 billion target remains to be seen, but the acknowledgement of the problem is itself notable. 

Equity Market: Narrow Rally Continues

The Nigerian equity market closed the week with a 0.73% gain, reaching 198,407.30 points. Year-to-date returns improved to 27.50%, maintaining what’s been an exceptionally strong start to 2026. The rally was supported by gains in PREMPAINTS, which jumped 32.88%, CONOIL up 20.95%, BUACEM rising 20%, FIDSON gaining 19.04%, and OMATEK adding 18.18%. Losses in SCOA, FORTIS, SOVEREIGN, and ALUMINIUM limited further upside. 

Market breadth remained weak with only 34 gainers versus 61 losers. When decliners outnumber advancers nearly two-to-one, it indicates the rally is concentrated in specific stocks rather than broadly distributed. This kind of narrow market participation can be sustainable if the leading stocks are high-quality names with strong fundamentals, but it also signals that many investors are taking profits or rotating out of positions rather than buying aggressively. 

Sectoral performance was mixed but positive overall. Oil and gas, industrial, and consumer goods sectors posted gains that offset weakness in insurance and banking stocks. The fact that banking stocks weakened despite being large-cap names suggests profit-taking after earlier gains or concerns about how falling interest rates might affect bank profitability. Lower rates are generally good for borrowers but can compress net interest margins for lenders if deposit rates don’t fall as quickly as lending rates. 

Fixed Income Market: Strong Demands Meet Strong Yields

The Debt Management Office held its Treasury Bills auction on March 11th, and the results revealed something interesting about investor psychology. The 364-day paper attracted ₦2.57 trillion in subscriptions against a ₦600 billion offer. That’s more than four times oversubscribed. The DMO allotted ₦933.9 billion across the 91-day, 182-day, and 364-day tenors with stop rates at 15.95%, 16.65%, and 16.72%, respectively. 

Despite enormous demand, stop rates barely moved from the previous auction. That tells you investors are willing to buy massive amounts of Treasury Bills, but only if they get paid adequately. When demand is that strong, but rates don’t fall, it means investors believe inflation risk justifies current yields or possibly even higher ones, as they’re selective about the returns they’re willing to accept. 

The strong bids at relatively higher rates pushed secondary market yields up 20 basis points to 17.66%. When yields rise, bond prices fall. A 20-basis point move in a single week is significant and reflects a bearish tone in the market. Investors who bought Treasury Bills at lower yields earlier are now seeing those positions lose value as yields climb. For new investors, higher yields mean better entry points, but they come with inflation risk that could erode real returns. 

Government bonds showed a similar pattern with yields rising 1 basis point week-over-week amid mild selling pressure on long-tenor instruments. In the Eurobond market, Nigeria’s sovereign papers weakened with yields increasing 8 basis points to 7.25%. Persistent geopolitical tensions triggered risk-off sentiment among global investors, making frontier market debt less attractive relative to developed market alternatives. 

The synchronized increase in yields across Treasury Bills, government bonds, and Eurobonds suggests investors are reassessing risk across Nigeria’s entire debt profile rather than just in one market segment.  

Where This Leaves You

There’s a temptation to look at markets in simple terms, either as up or down, or good or bad. The events of last week do not fit neatly into either category. 

Inflation in the U.S. is stable, which is supportive. China is showing early signs of demand recovery, which could lift global growth. But across emerging markets, including Nigeria, investors are becoming more careful, more selective, and more demanding. The gap between changing economic conditions and policy adjustments creates opportunities for investors who can read the signals early. 

Structural policy shifts take years to play out fully, but they establish trajectories that compound over time. Decisions about refining capacity, reserve composition, and sectoral liquidity don’t produce immediate market moves the way interest rate changes do. They shape the environment in which future growth occurs and determine which industries and companies benefit from evolving policy frameworks. Investors who position for these longer-term shifts rather than just trading near-term data releases tend to capture returns that others miss while chasing volatility.