Last week, the US added nearly twice as many jobs as expected. The Eurozone economy contracted for the first time since 2022. And Nigeria’s foreign capital inflows surged 84%, even as the stock market took a hit from the new T+1 settlement cycle.
Here’s what moved this week.
Global Economy
US: A Labor Market That Keeps Defying Expectations
Friday’s nonfarm payrolls report capped a week of mixed labor market data with a stronger-than-expected outcome. The US economy added 172,000 jobs in May, significantly above estimates of around 80,000. April’s figure was revised upward to 179,000 from the initially reported 115,000. The unemployment rate held unchanged at 4.3%.
Job openings increased to 7.618 million in April, the highest level in nearly two years and well above expectations of around 6.79 million. Job openings matter because they reflect employer demand for workers. Combined with strong payrolls numbers, it paints a picture of an employer base that’s still committed to growing headcount despite high interest rates and inflation concerns.
But the same week told a contradictory story. Initial jobless claims rose by 13,000 to 225,000 for the week ended May 30th, the highest level since early February. Announced layoffs at US employers increased for the third consecutive month in May, rising 16% from April to approximately 97,000. The report highlighted that companies continued to cite AI as the leading reason for job cuts for the third consecutive month.
Here’s what that combination actually means. The US labor market is simultaneously creating jobs in healthcare, hospitality, and government while eliminating them in technology and information sectors. Workers who lose AI-driven jobs aren’t simply moving to the positions being created. This structural mismatch between where jobs are disappearing and where they’re being created is why labor force participation keeps falling even as headline employment looks strong. People aren’t finding new opportunities. They’re leaving the workforce entirely.
Eurozone: First Contraction in Three Years
The Eurozone economy shrank by 0.2% in the first quarter of 2026, revised down from an initially reported 0.1% growth. This marks the first contraction since Q4 2022 and the sharpest decline since mid-2020. The downward revision was driven by a significant reassessment of Ireland’s GDP, which plummeted 12.1% in Q1, and a smaller contraction in France of 0.1%. Ireland’s GDP figures are notoriously volatile because multinational companies book enormous revenues through Dublin for tax purposes. When those companies adjust their structures, Ireland’s GDP swings dramatically even though the underlying Irish economy hasn’t changed much.
Among major eurozone economies, Spain led with 0.6% growth. Germany and Italy each expanded by 0.3%. The Netherlands grew by 0.1%. The divergence across eurozone members illustrates a fundamental challenge for the European Central Bank.
The weak performance reflects pressures from tight energy supplies, rising inflation tied to the Middle East conflict, and the ECB’s preparations for monetary tightening. Fixed investment fell 0.3%. Household consumption grew just 0.2%. Both drivers are responding to the same underlying uncertainty about energy costs and policy direction. Until those uncertainties resolve, the incentive to spend and invest is limited.
Sub-Saharan African Economies
African Eurobonds showed mixed performance with Nigerian papers broadly stable while Kenyan, Angolan, Egyptian, and Senegalese bonds continued experiencing varying degrees of weakness. The persistent divergence in African sovereign debt pricing reflects investors making increasingly sophisticated country-level assessments. The days of treating African sovereign debt as a homogeneous risk class are clearly behind us. Each country’s credit trajectory, policy credibility, and fiscal position is being priced individually.
South Africa: Business Activity Falls Back Into Contraction
The S&P Global South Africa PMI declined to 49.6 in May 2026 from 51.6 in April, falling below the 50.0 neutral threshold for the first time in five months. The deterioration was driven by declines in output and new orders, with new business contracting for the third time in four months at the fastest pace recorded this year.
Wholesale and retail trade experienced the sharpest slowdown. When trade contracts significantly, it affects everyone in the supply chain. Manufacturers produce less because retailers aren’t ordering. Distributors move less volume, warehouses sit emptier. The ripple effect from trade weakness spreads backward through the economy to producers and forward to consumers who find fewer goods available or pay higher prices for those that remain.
Inflationary pressures intensified sharply during the month. Input cost inflation accelerated to its strongest level since July 2022, driven by higher fuel prices. Businesses responded by passing costs to customers, resulting in selling price inflation rising to a 46-month high across all sectors. Nearly four years of monthly data.
Despite softer demand conditions, employment growth strengthened to its fastest pace since September 2022 as firms hired to fill existing vacancies. Businesses are investing in people even while the overall business environment is contracting. That contradiction suggests companies believe the current weakness is temporary and they want to be positioned for when conditions improve. Business confidence improved to its highest level of 2026, supported by strong project pipelines and expectations for more stable conditions. Companies are pessimistic about the present and optimistic about the future simultaneously.
Domestic Economy
Major Updates During the Week
1. Private Sector Accelerates to Nine-Month High
Nigeria’s private sector growth accelerated in May 2026, with the Stanbic IBTC PMI rising to 54.1 from 52.4 in April, its highest level since August 2025, driven by stronger output, increased new orders, higher inventory accumulation, and improving business confidence despite persistent cost and financing pressures.
2. Foreign Capital Inflows More Than Double in One Year
Nigeria’s total foreign capital inflows surged by 83.83% year on year to US$10.37 billion in Q1 2026, driven largely by portfolio investments in money market instruments and bonds, reflecting improved foreign investor confidence.
Equity Market: Profit-Taking Follows T+1 Launch
The Nigerian equity market closed the first week of June on a bearish note, with the NGX All-Share Index declining 3.11% to 242,593.31 points. Market capitalization fell 3.06% to ₦155.59 trillion. The timing is telling. T+1 settlement launched June 1st. Investors took profits the same week. The report explicitly links the selling to portfolio repositioning following the T+1 rollout. Operational changes in market infrastructure often trigger short-term portfolio adjustments as investors rebalance positions under new settlement conditions.
Selling pressure was concentrated in large and mid-cap stocks. When profit-taking is heaviest in the largest stocks, it indicates investors who’ve been sitting on substantial gains from the recent seven-week rally are locking in returns. ETERNA, FIRSTHOLDCO, WEMABANK, BUACEMENT, ARADEL, OANDO, MTN Nigeria, and Zenith Bank all weighed on performance. Their simultaneous decline in a single week almost certainly reflects deliberate positioning rather than fundamental concerns about any individual company.
All five major sector indices closed lower, with Oil and Gas leading the decline at negative 5.18%. Profit-taking in a sector that had performed strongly in previous weeks is the more plausible explanation. Market breadth was negative with 23 gainers against 51 losers, confirming the weakness was widespread rather than concentrated in a few names.
Fixed Income Market: Liquidity Surge Keeps Rates Stable
Fixed income market yields were mixed this week. Treasury bill yields rose 11 basis points to 17.48% amid mild selling pressure, while OMO bill yields declined 4 basis points to 20.72% on sustained demand. FGN bond yields remained broadly stable, though the mid and long ends of the curve edged higher.
The most significant development in fixed income was the surge in system liquidity. Liquidity improved dramatically to ₦6.02 trillion from ₦2.79 trillion the prior week, supported by increased placements at the Standing Deposit Facility window. The overnight rate eased 5 basis points to 22.19%. The Open Purchase Rate held unchanged at 22.00%.
On a month-over-month basis, both Treasury bill and bond yields increased across tenors, reflecting the prevailing high-yield environment. Monthly increases in yields while weekly moves are mixed suggests the overall trend is still toward higher rates, even if week-to-week movements show some volatility. The expectation from the fixed income team is that rates could moderate further if liquidity conditions remain supportive. That’s a conditional forecast. If the liquidity surge proves temporary and conditions tighten again, the rate moderation scenario doesn’t materialize.
The Bottom Line
Last week was a story of divergence. The US added jobs at twice the expected pace, even as layoffs rose and AI replaced workers. The Eurozone contracted for the first time since 2022. South Africa’s PMI slipped back into contraction. And Nigeria’s foreign capital inflows surged 84%, even as the stock market took a 3.11% hit from the T+1 transition.
For the average investor, the lesson is this: capital flows to where it feels safe and where it sees returns. Nigeria’s fixed-income market is attracting foreign money because yields are high and the currency has stabilized. The stock market is seeing profit-taking because valuations had run up and a structural change introduced uncertainty.
The T+1 settlement transition is a long-term positive. It brings Nigeria closer to global standards and could attract more foreign equity investors over time. But transitions are messy. Expect volatility in the coming weeks as the market adjusts.
