Lukman Otunuga,
FXTM Research Analyst
Nigeria will unveil updates on its
latest foreign exchange reserve figures in the week ahead, amid renewed
optimism over the progress of US-China trade talks. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Investors will be keeping a close eye to see
whether the nations foreign exchange reserves have increased in April given how
WTI oil prices peaked above $66.00 last week before tumbling lower. Sentiment
towards the Nigerian economy is likely to receive a boost should if reserves
meet or exceed the $47 billion expectations.
Asian currencies gaining against softer Dollar following US Q1 GDP
report
Over in the FX markets, Asian
currencies are generally pointing higher in Monday trade, after the US Dollar
softened following the release of its Q1 GDP report. The economic print
surpassed expectations, with 3.2% annualized growth for the first quarter of
2019, but the impressive headline reading failed to assuage the demands of
Dollar buyers, as US consumer spending slowed for a third straight quarter,
indicating that underlying domestic demand is waning. More US personal income
and spending data will be released later today, which should help investors
gain further insights into the primary driver of the US economy, and more
softness in consumer expenditure will be seen as a risk for further weakness in
the Dollar in the near-term. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Will the Dollar Index resume its climb this week?
A slowdown in US consumer spending
might be used as a reason for the Federal Reserve to delay further interest
rate increases during its policy meeting scheduled for this week, even as Fed
Funds Futures continue to point to more than a 50% chance of a US interest rate
cut by October. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html In the immediate term however, investors could use
Monday’s release of more inflation numbers to test the central bank’s
data-dependent stance.
The Dollar Index might have slipped
lower from its 2019 high last week, but it could still find reason to climb
back above the 98 handle, should April’s US non-farm payrolls report due on
Friday beat the 185,000 jobs that markets are expecting to be added. Continued
job creation in the United States should help allay concerns over the momentum
of consumer spending in the world’s largest economy.
Gold steady above $1,284 as global investors await key economic data
Concerns over the broader global
economic slowdown will be allayed, should Europe’s Q1 GDP and China’s PMI both
show signs of stabilizing when the respective datasets are announced on
Tuesday. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html However, any fresh reminders of soft patches in the
global economy following the disappointing data out of both Germany and South
Korea last week should encourage some risk to be taken off the table, which
should help the appeal of Gold in the near-term.
However, my view is that it might
require a string of dismal economic indicators to bring Gold back above the
psychological $1,300 mark and reverse the bearish trend seen in Bullion since
late-March.
Oil falls away from 2019 high after Trump pressures OPEC to lower
prices
Brent futures have dropped below the
$72 mark, after tumbling late last week on the back of US President Donald
Trump’s claim that he personally “spoke to” OPEC to lower Oil prices. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html The
steep decline in prices comes just days after the US administration stated that
sanction waivers on Iran’s Oil will end later this week, which initially
sparked a rally in the value of Oil on the hopes of tighter supplies.
However, uncertainty may prevail over
how strictly these waivers will be imposed on Iran and whether other producers,
like Saudi Arabia and the United Arab Emirates, will be able to fill the void
of a reported 1 million barrels of Oil per day by the time the waivers
expire. With the broader narrative of
resilient demand and tighter supply in the market encouraging investors to buy
Oil, prices can still find the impetus to resume the uptrend seen so far in
2019.
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