Global financial markets experienced mixed performances last week as easing tensions in the Middle East pushed oil prices lower, while major central banks maintained strict monetary policies to combat inflation.
Investors welcomed the reduction in geopolitical risks after the United States and Iran reached an interim peace agreement. The development eased concerns about disruptions to global oil supplies and led to a sharp drop in crude oil prices. However, financial markets remained cautious as central banks in major economies signaled that interest rates would likely stay high for an extended period.
In the United States, the Federal Open Market Committee held its latest policy meeting under its new chairman, Kevin Warsh. The committee decided to keep interest rates unchanged between 3.50 percent and 3.75 percent. Although the U.S. economy continues to show resilience, inflation remains above target at 4.2 percent.
Market analysts noted that the decision confirms that borrowing costs may remain elevated for some time, affecting businesses, governments and consumers. Higher interest rates are often used to slow inflation but can also reduce investment and economic activity.
The Bank of England adopted a similar approach, leaving its benchmark interest rate at 3.75 percent. Although inflation in the United Kingdom has fallen to its lowest level in over a year, policymakers remain concerned about persistent price pressures in areas such as transportation and services.
One of the most significant developments during the week was the sharp decline in global oil prices. The peace agreement between the United States and Iran helped restore confidence in oil supply routes, particularly through the Strait of Hormuz, a critical shipping channel for global energy exports.
As a result, Brent crude oil fell by more than 13 percent to $80.43 per barrel, while U.S. West Texas Intermediate crude dropped over 15 percent to $76.41 per barrel. The decline erased much of the price increase recorded during recent geopolitical tensions.
Gold prices recorded modest gains as investors continued to seek safe-haven assets. The precious metal rose by 1.86 percent to close at $4,152.05 per ounce. Meanwhile, the cryptocurrency market remained relatively quiet. Bitcoin posted a slight increase of 0.39 percent, while Ethereum gained just over 3 percent.
Across Africa, inflation remained a major concern. South Africa’s inflation rate rose to 4.5 percent in May, driven largely by higher transportation and fuel-related costs. Economists believe the recent drop in global oil prices could help ease inflationary pressure in the coming months.
Nigeria also continued to face inflation challenges. According to the National Bureau of Statistics, the country’s headline inflation increased for the third consecutive month to 15.93 percent. Rising food prices, transportation costs and supply challenges in the agricultural sector contributed to the increase.
The Nigerian stock market had a difficult week as investors engaged in profit-taking. The Nigerian Exchange All-Share Index declined by 3.59 percent, while total market capitalisation dropped to N153.37 trillion.
Several major companies recorded losses, including Dangote Cement and First HoldCo. Trading activity also weakened significantly compared to the previous week.
Despite the market decline, regulators introduced measures aimed at strengthening the financial system. The Nigerian Exchange proposed changes to its trading structure to improve market efficiency and liquidity. At the same time, the Central Bank of Nigeria released draft regulations requiring financial holding companies to maintain stronger capital buffers.
Experts believe these reforms could encourage fresh capital raising and improve long-term stability in Nigeria’s financial sector.
Overall, while falling oil prices provided relief to global markets, concerns about inflation and prolonged high interest rates continued to influence investor decisions worldwide.
