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Breakfast Report - 22 August 2022
- Headline inflation rose to 19.64% y/y in July, marking the sixth consecutive month of growth and the highest print in 17 years. Inflation was higher in both the food (22.02% y/y) and core (16.26% y/y) segments, with food inflation primarily driven by pricey farm produce (+42.76% y/y) which was triggered by increased insecurity in food-producing communities. Likewise, Given the 3-9% increase in PMS prices in the month of July, energy pressures played a significant role in the most recent increase, driving up core inflation. In the short term, sustained energy and currency shocks (given the naira's increased volatility) could drive inflation higher.
- Equity: Last week’s bearish sentiment could be seen in the 59bps w/w dip in the ASI and with the current sentiment in the market, we expect neutral to negative sessions this week with pockets of positive close across sectors.
- Fixed Income: The NTB market is expected to open on a quiet note this week, as investors remain on the side lines ahead of the NTB primary market auction on Wednesday. Similarly, given the current liquidity squeeze, the bonds market should continue to trade on a tepid note, with a strong bearish undertone.
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