Every week, global and domestic financial markets move in ways that directly shape your spending, saving, and investing decisions. Welcome to another edition of Market Watch, where we break down the biggest money stories from the past week into clear, simple language.
Whether you want to build wealth or keep your savings safe from rising prices, this guide gives you the essential takeaways you need to make confident choices.
Global Economy
US: Stock Markets Move in Mixed Directions as Interest Rates Rise
US stock markets ended the week on a mixed note as investors evaluated rising crude oil prices, higher government borrowing costs, and the Federal Reserve’s first interest rate hike in over three years. The central bank raised its target rate by 0.25% to a range of 3.75% to 4.00%, signaling that another increase could follow before the year ends.
Higher interest rates make borrowing more expensive for businesses. This extra cost put heavy pressure on smaller companies, pulling the Dow Jones Industrial Average down by 1.7% and the S&P 500 down by 0.1%. However, tech companies pushed the Nasdaq Composite up by 0.7% due to steady demand for artificial intelligence and computer chips.
At the same time, West Texas Intermediate crude oil stayed high at $100.30 per barrel and Brent crude reached $103.87 per barrel, keeping extra pressure on everyday living costs. Meanwhile, the job market stayed strong as new unemployment claims dropped by 10,000 to 196,000, which is way below the projection of 208,000.
Europe: Stocks Fall as Energy Costs Drive Inflation Higher
Stock markets across Europe closed lower across the board as rising energy bills and persistent inflation made investors cautious. The regional STOXX Europe 600 index fell 0.6% and Germany’s DAX dropped 1.1%, with car makers and telecommunications companies suffering the biggest price declines. Automotive giant Volkswagen fell 5.6% after cutting its business outlook, while Airtel Africa dropped 11.3% following reports that it might reduce the size of its mobile money stock listing.
Inflation in Europe rose to 3.2% in August, driven by a sharp 14.3% increase in light and heating bills. High inflation makes central banks hesitant to lower interest rates, which slows down broader economic growth. In the UK, the Bank of England kept its main interest rate at 3.75%, but warned that rates could rise if global prices keep climbing.
Sub-Saharan African Economies
The African Eurobond market saw mixed reactions from investors last week. Nigerian bonds saw a small rise in yields, which means investor interest was slightly muted. On the other hand, Kenyan and South African bonds saw their yields rise further. Senegal experienced mixed movements, with its longer-tenor yield easing slightly.
Ghana: Government Cuts Fuel Exports to Protect Local Supply
Ghana’s state-owned fuel distributor, BOST Energies, cut back on petrol and diesel exports to neighboring Burkina Faso and Mali in August. Burkina Faso requested 80,000 tonnes of fuel, but Ghana supplied only 40,000 tonnes, while exports to Mali totaled just 10,000 tonnes out of a requested 40,000 tonnes. By holding back fuel exports, Ghana is protecting its own citizens and local businesses from energy shortages and price surges amid tight global oil supplies.
Angola: Interest Rates Drop as Inflation Hits Single Digits
Angola’s central bank reduced its main interest rate by 1.00% down to 14.75%, marking its third consecutive rate cut. Annual inflation in Angola fell to 8.78% in August from 9.33% in July, reaching single digits for the first time in over ten years. The central bank also kept its full-year inflation target at 8.6%.
Lower interest rates make borrowing cheaper for businesses and households, helping to stimulate business loans, creation of local jobs, and economic growth as price pressures ease.
Senegal: Country Partners with Eni to Expand Offshore Oil Exploration
Senegal signed an agreement with Italian energy company Eni to assess the potential of five deep-water offshore oil and gas blocks. Eni will fund all preliminary geological and geophysical studies for the SN01M, SN02M, SN03M, SN07M, and SN40M sites, while state-owned Petrosen will play a central role in guiding development.
Developing new energy fields attracts substantial foreign investment, boosts government revenues, and creates skilled jobs across the country.
Domestic Economy
Major Updates During the Week
Before looking at the local financial markets, here is a quick look at where our core economic numbers stand:
1. Headline Inflation Slows Down Marginally to 15.39%
Nigeria’s headline inflation rate eased slightly to 15.39% year-on-year in August from 15.43% in July, marking its second straight monthly decline. Food inflation fell to 19.57% from 20.31%, supported by fresh harvest arrivals that increased the supply of key food staples. Core inflation, which excludes volatile food items, dropped significantly to 13.29% from 14.97%.
Slowing inflation means prices are not rising as fast as before, giving your household budget a breather and helping your daily income hold its purchasing power.
2. Naira Weakens Slightly at the Official Foreign Exchange Market
The Naira depreciated slightly at the official window during the week, closing at ₦1,331.28 per dollar on September 18 compared to ₦1,326.30 at the start of the week. This represents a small drop of ₦4.98 or 0.38% in value.
A minor decline in exchange value can make imported items and manufacturing materials slightly more expensive for local businesses, though the small size of the movement points to short-term currency stability.
Equity Market: Nigerian Stocks Surge 2.78% as Buyers Return
The Nigerian stock market had a very strong week, supported by fresh buying across major sectors. Overall market value increased by 2.90% to ₦162.16 trillion, while the All-Share Index gained 2.78% to close at 249,804.56 points.
Trading activity jumped by 60.53% as investors returned to buying stocks after holding cash in previous weeks ahead of the Dangote Refinery Initial Public Offering (IPO). Out of all traded shares, 61 gained value while 32 declined. Real estate fund UPDCREIT led the gainers with a 34.91% jump, followed by Sovereign Trust Insurance (+30.95%), Mutual Benefits Assurance (+22.03%), NGX Group (+21.55%), and First HoldCo (+17.65%). On the flip side, Transcorp Power fell 18.94% and John Holt dropped 18.89%. Broad demand across all main sectors showed that overall investor confidence is rising rapidly.
Fixed Income Market: Safe Government Investments Keep Paying High Returns
If you are looking for safe ways to grow your savings, government investments stayed very steady last week.
When you invest in Treasury bills, you are lending money to the government for up to one year. Short-term bills are currently paying 17.77% per year, medium-term bills offer 19.10%, and long-term bills pay up to 19.76%. These return rates barely changed from the previous week, meaning yields remain steady and attractive.
Government bonds work similarly, but they let you lock in your money for longer periods. Overall bond returns stayed around 16.58%. However, because many investors rushed to buy short-term bonds, the interest payout on those shorter bonds dropped to 17.18%. Meanwhile, long-term bond returns eased slightly to 15.47%.
Since these investments are backed by the government, they carry virtually no risk of losing your principal money. Right now, they offer everyday investors a reliable way to earn strong, double-digit returns on their cash.
What This Means for Your Money
Last week gave us two very encouraging signs. First, inflation slowed down for the second straight month, and the local stock market bounced back by 2.78%.
Now that investors are done saving cash for the Dangote Refinery IPO, buying activity has returned to the stock market. If you are looking to invest in shares, do not rush to buy every stock that is going up. Instead, focus on reliable, profitable companies in strong sectors like real estate, banking, and insurance that pay steady dividends.
At the same time, safe government investments like Treasury bills and short-term bonds are still offering high returns between 17% and 20%. Putting a portion of your money into these fixed-income options lets you grow your cash safely while keeping it protected from inflation. Combining steady dividend-paying stocks with high-yielding government investments is the smartest way to build and protect your wealth right now.
