This week promises to be pivotal for Nigeria and global markets, as investors brace for central bank decisions, key economic data, and a flurry of high-stakes corporate earnings.
CBN Expected to Hold Rates amid Stubborn Inflation
Nigeria’s central bank is widely expected to maintain its benchmark interest rate when it meets on Tuesday.
Although inflation has declined for three consecutive months, easing to 22.2% year-on-year in June, it remains uncomfortably high.
“The Central Bank of Nigeria (CBN) may delay any potential rate cut until the second half of the year, contingent on a sustained decline in inflationary pressures”, says Lukman Otunuga, senior market analyst, FXTM.
Stock Market Rally Continues
The Nigerian Exchange (NGX) All Share Index has gained nearly 10% month-to-date, pushing total gains for 2025 to almost 30%.
Continuing, Otunuga wrote: “Looking at the NGX All Share Index, it has gained almost 10% month-to-date – pushing 2025 gains to nearly 30%.
“This means the NGX is currently outperforming the S&P500 and Nasdaq100 who have gained roughly 7% and 11% this year respectively. The Naira spot has held its ground against the USD this year after depreciating almost 70% in 2024”.
Global Focus: Big Tech Earnings and ECB Decision
Outside Nigeria, the global earnings season intensifies, with market attention shifting to U.S. tech giants this week.
Alphabet and Tesla are set to report second-quarter results on Wednesday. Alphabet shares surged 14% in Q2 on the back of strong demand for AI products and continued cloud growth.
However, with the stock still negative year-to-date, bullish momentum may hinge on strong earnings. Tesla, down nearly 20% in 2025, risks deeper losses if results disappoint.
On the macro front, key data releases from Europe, the UK, Japan, and the U.S. will shape market sentiment.
But the spotlight will fall on the European Central Bank’s (ECB) policy decision on Thursday. While no rate changes are expected, any forward guidance could trigger fresh volatility in currency and bond markets.
Currently, traders are assigning less than a 50% probability of an ECB rate cut by September.
Dollar Weakens as Tariff Risks Loom
In currency markets, the U.S. dollar has weakened across the board, with the Dollar Index (DXY) sliding toward 97.70.
This decline reflects growing pressure from former President Donald Trump on the Federal Reserve to cut rates, alongside investor caution ahead of the looming August 1st tariff deadline.
Nigeria Braces for U.S. Tariff Impact
Adding to Nigeria’s challenges, the country faces a 14% reciprocal tariff on goods exported to the U.S., effective August 1st.
The potential impact on trade flows and export revenues could raise fresh concerns for policymakers and exporters alike.
