Global Economy

US: U.S. inflation rose to 2.7% y/y in June 2025 (vs. 2.4% in May), in line with forecasts and marking the highest since February. Key drivers included higher prices for food (+3%), transport services (+3.4%), and used cars (+2.8%). Energy prices declined less (-0.8% vs -3.5%), with gasoline (-8.3%) and fuel oil (-4.7%) still falling, while natural gas stayed high (+14.2%). Shelter inflation eased slightly to 3.8%. Headline CPI rose 0.3% m/m (largest in 5 months), while core CPI rose 0.2% m/m (vs. 0.1% prior, 0.3% est). Core inflation ticked up to 2.9% y/y, still below expectations (3%).

Sub-Saharan African Economies

China: The PBoC held key lending rates steady in June, keeping the 1-year LPR at 3.0% and the 5-year at 3.5%, as expected. This follows a 10bps cut last month aimed at offsetting the impact of new U.S. tariffs. Despite mixed economic data, strong May retail sales, weak industrial output, and below-forecast lending, the decision signals confidence in hitting GDP targets. Major state banks had also recently cut deposit rates to support growth.

Angola: The National Bank of Angola held its benchmark rate at 19.5% for the 14th straight month in July 2025, while lowering the reserve requirement on local currency deposits to 18% to boost liquidity. GDP growth for 2024 is estimated at 4.4%, above the oil sector’s 3.61%. Inflation eased to 19.73% in June from 20.74% in May, supported by a stable kwanza and improved supply conditions.

Nigeria: Nigeria’s inflation eased to 22.22% in June 2025 its lowest since April 2023 driven by base effects and relative FX stability. However, food inflation rose to 21.97%, reflecting Sallah-induced price surges. Core inflation also climbed to 22.76%. On a monthly basis, headline inflation increased to 1.68% from 1.53% in May.

South Africa: South Africa’s retail sales grew by 4.2% y/y in May 2025, slightly below the 4.4% market expectation and following a revised 5.2% rise in April. Key drivers included strong gains in clothing and footwear (+12.5%) and general dealers (+3.6%). On a seasonally adjusted basis, monthly retail sales edged up 0.1%, while sales for the three months to May rose 3.5% compared to the same period last year.

 

Domestic Economy

Major updates during the week:

  • Cost pressures in Nigeria continued to ease for the third straight month, with headline inflation moderating to 22.22% in June 2025 (from 22.97% in May), even as rising core (22.76%) and food (21.97%) inflation, alongside a pickup in monthly price growth.
  • In Q2 2025, the CBN reported rising demand and availability of secured credit amid widening loan spreads for households and narrowing spreads for corporates, highlighting a divergence in borrowing conditions, even as default rates climbed.
  • Aliko Dangote plans to build a deep seaport in Olokola, Ogun State, to support exports from the Lekki refinery, potentially becoming Nigeria’s largest port.

Nigerian equity market: Ngx rallies for eighth consecutive week as industrial stocks lead the charge

The Nigerian equities market extended its bullish momentum for the eighth straight week, closing 4.31% higher at 131,585.66 points despite a shortened four-day trading week due to a public holiday. Market capitalization advanced by 3.1% to ₦83.24 trillion, with YTD gains reaching 27.84%. Gains were largely driven by renewed interest in industrial heavyweights, particularly cement stocks, as the Industrial Goods sector surged 19.17% week-on-week. DANGCEM, BUACEMENT, and WAPCO were top contributors to the rally, alongside strong performances from STANBIC, UBA, ACCESSCORP, NESTLE, and IMGN.

Nigerian fixed-income market: New inflation print supports market sentiment

This week, the fixed income market remained bullish despite the absence of primary auctions and tight system liquidity, which averaged ₦350 billion deficit. Investors moved to lock in current yields ahead of a potential rate decline, while inflation eased to 22.22%, reinforcing positive sentiment. Treasury bill yields dropped 55bps week-on-week, driven by demand for short-term instruments, while bond yields declined 29bps week-on-week to an average of 16.53%. In contrast, long-tenor Nigerian Eurobonds saw slight pressure, with the average yield rising 11 bps week-on-week. Looking ahead, we expect sustained positive sentiment on the back of expected improved system liquidity and the upcoming auction.