Global Economy

U.S.A: U.S. inflation unexpectedly climbed to 3% in January, surpassing forecasts of 2.9% and driven partly by a surge in egg prices—up 15.2% for the month and 53% year-on-year due to avian flu—while the CPI rose 0.5% month-on-month. This robust inflation data has bolstered expectations that the Fed will hold rates steady rather than accelerate cuts, with Fed Chair Jay Powell emphasizing that despite progress, policy remains appropriately restrictive amid ongoing inflation risks. Treasury yields reacted modestly, with the two-year yield nudging up by 0.07 percentage points to nearly 4.36%, and while the S&P 500 fell by as much as 1.1% at the open, it closed 0.3% lower; meanwhile, the Nasdaq edged higher. Adding to the mix, President Trump renewed his demands for lower rates and higher tariffs on his social media platforms, intensifying concerns that his policy proposals could further fuel inflation and complicate the economic outlook.

Sub-Saharan African Economies

U.K: According to preliminary estimates from the Office for National Statistics, the UK economy grew by 0.1% in Q4 2024, beating expectations of a 0.1% contraction. The modest expansion was driven by gains in services and construction, which rose by 0.2% and 0.5% respectively, even as production fell by 0.8%. In December, growth picked up to an estimated 0.4% month-on-month, reflecting a rebound in services and production. Sluggish overall growth and easing inflation prompted the Bank of England to cut its benchmark rate to 4.5% last week, with further rate cuts expected as inflationary pressures gradually wane.

Angola: Angola’s inflation rate eased for the sixth consecutive month, settling at 26.48% in January 2025 from 27.50% in December 2024—the lowest level since March—supported by the relative stabilization of the kwanza. On a monthly basis, consumer prices rose by 1.67% in January, slightly below December’s six-month high of 1.70%.

Senegal: Senegal’s  inflation rate rose to 1.8% in January 2025 from 0.8% in the previous month, marking a two-month uptrend and the highest level since May. The increase was driven by higher costs in food, housing, transport, and household goods, while communication prices declined. On a monthly basis, inflation picked up by 1.1%, the first rise in three months. Meanwhile, the statistics agency has updated its calculations to use 2023 as the new base year, replacing 2014.

Rwanda: Rwanda’s inflation rate eased to 5.7% in January 2025 from 6.4% in December, driven by slower price increases in food, housing, and clothing. On a monthly basis, consumer prices fell by 1.6%, matching the previous month’s decline. In response to this moderation, the National Bank of Rwanda kept its benchmark rate steady at 6.5% in its February meeting, citing inflation expectations within the 3%-8% target range. However, despite the recent slowdown, the inflation forecast for 2025 was revised upward to 6.5% from 5.8%, with a projection of 4.1% for 2026.

Domestic Economy

Major updates during the week:

  • The CBN’s January 2025 PMI report shows a slowdown in private sector growth, with the Composite PMI falling to 50.2 from 51.3 in December, as most sectors declined except Industry, while FX stability and easing inflation may support PMI above 50 despite high costs and insecurity risks.
  • Nigeria’s National Assembly passed the N54.99trn 2025 appropriation bill, up from N35.05trn in 2024, with increased allocations for capital expenditure, debt servicing, and sector-specific investments, while concerns remain over revenue generation and implementation efficiency.

Nigerian equity market: Bullish momentum continues on the NGX

The domestic equities market sustained its bullish run as positive sentiment amid earnings releases drove investor interest, pushing the YTD return to 4.98%. The All-Share Index (ASI) closed the second week of February up 2.00% at 108,053.95 points, compared to 105,933.03 points the previous week. Market gains were driven by heavyweight stocks such as DANGCEM (+21.83%), VFD (+30.63%), ETERNA (+22.78%), MTNN (+3.61%), and TRANSCOHOT (+9.99%). These gains offset losses in BUAFOODS (-10.00%), JBERGER (-8.44%), and EUNISELL (-9.70%). On a sectoral basis, three out of five sectors closed in the bearish region, while the Industrial Goods sector gained 10.36% and the Insurance index rose by 2.52% WoW.

Nigerian fixed-income market: A green market week.

Trading activity this week leaned towards the positive, with modest gains recorded in the fixed-income market. The treasury bills segment closed on a strong note, as the average yield declined 37bps to 22.16%, driven primarily by the longest tenors. Notably, the yield on the 20-Nov-2025 bill dropped 149bps to 22.65%. A similar trend was observed in the bond market, where the average yield fell 28bps to 20.25%, reflecting strong buying interest in mid-tenor bonds such as the Nov-2029, which declined 58bps to 21.10%. In the Eurobond market, Nigerian Eurobonds were in favor, with yields decreasing 24bps to 9.07% (WoW). Next week, we anticipate a continued positive interest as investors seek to take advantage of the current yield environment amidst the expected macroeconomic data.