With
consumer prices slowly edging closer to the Central Bank of Nigeria’s target
ban of 6%-9%, an interest rate cut seems likely before year-end. The
combination of easing inflationary pressures, improving economic fundamentals
and ongoing foreign exchange stability could encourage the CBN to cut interest
rates in the second half of 2018.
Euro could
crumble if ECB disappoints
The
Euro has extended gains against the Dollar today, ahead of what could be
considered as one of the European Central Bank’s most significant policy
meetings this year.
Although
the ECB is widely expected to keep monetary policy unchanged in June, investors
are likely to be more concerned with the latest economic growth and inflation
forecasts. Expectations remain somewhat elevated over the ECB potentially
signalling an end to QE at the meeting. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
While hawkish comments from ECB officials and accelerating inflation have
fueled speculation over QE coming to an end, this could be a classic case where
markets may be setting themselves up for disappointment.
With
economic growth in the Eurozone slowing in recent months and lingering
political risk in Italy weighing on sentiment, Mario Draghi may be hesitant to
reveal a QE end-date. This possible reluctance may leave investors empty-handed
and ultimately expose the Euro to heavy losses.
With regards
to the technical picture, the EURUSD is starting to look bullish on the daily
charts. Prices are trading above the daily 20 Simple Moving Average while the MACD
is in the process of crossing to the upside. A solid daily close above the
1.1820 level could encourage an incline higher towards 1.1890. Alternatively,
if the 1.1820 proves a stubborn resistance, then prices may descend back
towards 1.1750.
Hawkish Fed
raises interest rates
In a
widely expected move, the Federal Reserve has raised its key interest rate by
25 basis points for the second time this year. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
The central bank struck a hawkish tone in the latest policy statement and even
surprised markets by forecasting two additional rate hikes in 2018. With growth
expected to remain solid in the United States and inflation projected to
accelerate, the Fed could embrace a more aggressive approach towards monetary
policy normalization.
Sentiment
towards the US economy is likely to receive a boost following the upgraded
economic forecasts, especially when considering how unemployment is projected
to fall to a 50 year low this year. All in all, the relatively positive
assessment of the US economy and rising inflation expectations may fuel market
speculation of higher interest rates. With two additional rate increases now
expected by the end of the year, the Dollar has the potential to appreciate
further.
Commodity
spotlight – Gold
Gold
prices have staged a solid rebound despite the Federal Reserve raising US
interest rates by 25 basis points yesterday evening.
There
is a suspicion that the yellow metal’s appreciation could be off the back of
Dollar weakness. With investors simply engaging in a bout of profit-taking on
the Greenback following the US interest rate increase, Gold could appreciate
further in the short term. However, Gold’s gains are likely to remain limited
by heightened expectations over two more US interest rate increases this year.
Taking
a look at the technical picture, the decisive breakout above the $1300
psychological level could invite an incline higher towards $1324.
Have you heard this? Many
Nigerian exporters have been defrauded of huge amount of money in the process
of exporting commodities to foreign countries. Do you know why? They were not
trained on export operations, management, documentations and the best methods
of payment in export trade. This is terrible!!! Nigerians cannot continue to
lose money to foreigners in the course of export business. Exporters, why don’t
you get a practical manual that teaches the stages of export trade from
processing and packaging of commodities to receipt of payment by the foreign
buyers. It teaches export operations, export management, export documentations
and methods of payment in export trade? It is a contemporary step-by-step guide
to export trade. It tells all the contemporary dynamics in export trade. To get
it, click on the link below:
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