Lukman Otunuga,
FXTM Research Analyst
Even as WTI futures have fallen below $64/bbl at the time
of writing, Oil prices remain on course for their longest run of weekly gains
since 2016. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
The conflict in
Libya and US sanctions output on Venezuela and Iran are constraining Oil
supplies, even as OPEC+ producers press on with cuts through June. Rising Oil
prices will remain a welcome development for Nigeria, given how a handsome
chunk of export revenues are sourced from Oil sales. Appreciating Oil prices
are likely to provide foreign exchange stability, ability to implement 2019
budgets and economic growth. However, it still leaves the country vulnerable to
external shocks.
With
uncertainties revolving around slowing global growth potentially derailing
attempts by OPEC+ to rebalance, Nigeria still needs to break away from Oil, and
to derive growth from other sustainable sources.
Markets
mixed ahead of US earnings
European shares
traded flat on Friday as investors evaluated China’s latest trade figures.
Although
China’s exports rebounded in March, rising over 14.0% year-on-year, imports
disappointed by shrinking 7.6% - marking a fourth consecutive month of decline.
With the trade figures illustrating a mixed picture of
the second largest economy in the world, investors are likely to adopt a
guarded approach ahead of first quarter earnings releases from two of the
biggest banks in the United States. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Investors may get a glimpse on how the fading impacts
of tax cuts and the Federal Reserve’s cautious shift on interest
rates have impacted JP Morgan and Wells Fargo. Should earnings from both banks
disappoint, risk sentiment for global equities may take a hit.
Dollar
Searches for new catalyst
The Dollar
Index has surrendered much of its gains and is now trading below the 97 mark,
even as the latest US Producers Price Index exceeded market expectations, while
jobless claims surprisingly fell to their lowest levels since 1969.
Coupled with the March US inflation data released
earlier this week, the data underscores the central bank’s “patience” on US
interest rates, and this may remain unchanged for the rest of 2019. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Markets have
now dialled back expectations of a US rate cut by December to just below 50
percent, from above 57 percent earlier this week. With such odds being priced
into the Greenback, any data or event that tilts the balance of risks to either
side could influence the Dollar’s direction, although which is the way forward
remains uncertain for the time being.
Gold
steadies after biggest drop in two weeks
Meanwhile,
markets are pushing the boundaries on risk sentiment as Gold fell by over 1
percent on Thursday before bouncing off the $1,290 mark. Although the IMF’s cut
to its 2019 global growth forecast was a downer, investors are hoping that a
not-too-distant US-China trade deal and a stabilizing Chinese economy may
weaken headwinds currently felt by the global economy. However, should the
outlook take a turn for the worse, that could jolt risk-off sentiment and rally
support for the safe haven assets, including Bullion.
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