Global Economy

US: The Federal Reserve cut the federal funds rate by 25 basis points to a target range of 3.75%–4.00% at its October 2025 meeting, matching market expectations and marking the second consecutive rate reduction. The move brings borrowing costs to their lowest level since 2022, as policymakers pointed to rising downside risks to employment and still-elevated inflation. The decision was not unanimous, Governor Miran favored a deeper 50bps cut, while Kansas City Fed President Schmid preferred to hold rates steady. In his press briefing, Chair Jerome Powell noted that a December rate cut is not guaranteed, even as investors widely expect another 25bps reduction in line with the Fed’s September projections. The Fed also announced plans to end its balance sheet reduction program on December 1, signaling a gradual shift toward a more accommodative policy stance.

Sub-Saharan African Economies

Euro Area: The European Central Bank (ECB) kept interest rates unchanged for a third consecutive meeting in October, reflecting confidence in the eurozone’s resilience and waning inflation pressures. The main refinancing rate held at 2.15%, while the deposit facility rate remained at 2.0%. The ECB noted that inflation is now near its 2% medium-term target, with the outlook broadly unchanged. Growth has persisted despite global headwinds, supported by a strong labor market, healthy private-sector balance sheets, and the lagged effects of earlier rate cuts. Nonetheless, the Bank cautioned that risks remain tilted to the downside, citing ongoing trade frictions and geopolitical tensions. Policymakers reaffirmed their commitment to a data-dependent, meeting-by-meeting approach to guide future monetary policy decisions.

Kenya: Kenya’s annual inflation rate stood at 4.6% in October 2025, the highest since June last year, unchanged from September. Still, inflation remained below the 5% midpoint of the central bank’s target range for a 17th straight month, partly due to weak domestic demand. Meanwhile, the core inflation, the central bank’s preferred gauge of underlying price pressures, slowed to 2.7%, compared with 2.9% in September. On a monthly basis, consumer prices rose by 0.2% in October, the same pace as in the previous period.

South Africa: South Africa’s trade surplus widened to ZAR 21.8 billion in September 2025 from a downwardly revised ZAR 2.4 billion in the prior month. It was the largest trade surplus since March this year, as exports soared 9.4% over a month to a 2-1/2-year high of ZAR 186.4 billion, boosted by precious metals & stones (+34%). Shipments also increased for mineral products (+8%); base metals (+8%) and vehicles & transport equipment (+7%) but fell for vegetable products (-6%). Exports rose to the Americas (+28.9%), Asia (+19.5%) and Oceania (+6.5%), while declining to Africa (-2.9%) and Europe (-1.3%). Meanwhile, imports dropped by 2% to ZAR 164.6 billion, on lower purchases of original equipment components (-18%); vegetable products (-20%) and precious metals & stones (-17%).

Domestic Economy

Major updates during the week:

  • The Federal Inland Revenue Service (FIRS) directs banks, stockbrokers, and other financial institutions to commence the deduction of a 10% WHT for short-term securities
  • The FIRS introduced a 15% import duty on petrol and diesel, in line with the Federal Government’s approval
  • The NGX All-share index ends the week lower by 0.98% to 155,647.50 points

Nigerian equity market: Week-on-week decline prevails amid bargain hunting and mixed earnings

The Nigerian equities market closed the week on a bearish note, weighed down by weak earnings from select counters and renewed investor interest in small- to mid-cap stocks. The NGX All-Share Index fell by 0.98% to 155,640.55 points, while market capitalization similarly declined by 0.98% week-on-week to ₦97.8 trillion. Sectoral performance was broadly negative, with four of the five key indices posting losses led by the Industrial Goods index (-3.47% WoW), followed by Consumer Goods (-2.73% WoW), Banking (-2.11% WoW), and Insurance (-1.02% WoW). Overall market sentiment remained subdued, reflecting disappointing corporate results, profit-taking by investors, and corrective movements in select stocks.

Nigerian fixed-income market: New treasury bills issued at higher yield amid sustained resistance

At the October bond auction, the Debt Management Office (DMO) successfully raised ₦313.78 billion, exceeding the ₦260 billion on offer across two maturities (August 2030 and June 2032). Notably, the DMO achieved this at lower stop rates, with the 2030s clearing at 15.83% (down from 16.00% at the previous auction) and the 2032s at 15.85% (down from 16.20%), underscoring its continued efforts to reduce borrowing costs. In the secondary market, mild positive sentiment was observed in the Treasury bills segment, where the average yield dipped by 1bp to 17.43%, supported by demand for short- and mid-tenor instruments. Conversely, the bond market weakened, as the average yield inched up by 2bps to 15.90%, following selling pressure on short- and mid-tenor bonds. Meanwhile, the Eurobond market extended its positive momentum, with the average yield declining by 15bps to 7.66%, reflecting sustained investor appetite for Nigerian sovereign papers. Looking ahead, we anticipate a possible uptick in buying interest as investors take advantage of prevailing yield levels.