Global growth
concerns, U.S.-China trade tensions, and other geopolitical risk factors remain
a drag on global risk sentiment. However, the Nigerian stock markets have
recorded an impressive YTD growth of roughly 3.31% despite global headwinds and
mounting political risk ahead of the presidential elections. With domestic
investors seen bargain hunting as the elections loom, the All Share Index (ASI)
is seen pushing higher.
While the Naira
continues to witness stability against the Dollar, volatility could be in the
cards depending on the election outcome. A perceived market-friendly result
will be positive for the local currency.
Investors on the sidelines
Investors in
Asia are sitting on the sidelines as they cautiously await the outcome of
high-level trade talks between the U.S. and China. With the earnings season
almost coming to an end, asset prices will begin to fluctuate on daily news
headlines. So far, it seems we have more positive than negative news which may
continue to support equities.
President Donald
Trump is willing to extend the trade deal deadline if the two parties seem to
be coming closer to a resolution. A good outcome from the expected meeting on
Friday between China’s President Xi Jinping and his counterparts U.S. Treasury
Secretary Steven Mnuchin and trade representative Robert Lighthizer may further
prolong the rally in global equities.
Mr. Trump also
intends to sign a U.S.-Mexico border security deal despite the fact he’s not
happy with it. Any news on avoiding another shutdown is welcomed by the
markets.
On the data
front, U.S. consumer prices remained steady for a third straight month in
January. Stable prices have led y-o-y CPI to grow at its slowest pace in one
and a half years suggesting that the Fed may keep interest rates on hold for
some time if the economic outlook deteriorates further. However, the Dollar
reacted positively to the data, given that when excluding the volatile
components such as food and energy, the core-CPI stood at 2.2%. Such
information may be conflicting in a sense that headline inflation doesn’t
require further tightening in monetary policy, while core inflation indicates
that we cannot rule out further hikes later this year.
Commodity
currencies were the main beneficiaries of stronger than expected Chinese data
earlier today. Chinese exports rebounded sharply in January rising 9.1% y-o-y
beating consensus of a 3.2% decline by a wide margin. Imports, while dropping by 1.5%, also showed
much better than the expected 10% decline. The Australian Dollar and New
Zealand Dollar were up 0.5% at the time of writing.
The Euro
continued to struggle despite the improved appetite to risk. The single
currency tested 1.1249 earlier today on the back of a series of disappointing
data releases and political uncertainty. The latest political drama comes from
Spain, which is heading into a snap election following a budget defeat. If a
right-wing coalition takes over, expect to see more troubles ahead in the
Eurozone. Other factors that contributed to Euro weakness include the continued
plummeting of German Bond Yields. All maturities below 10-years are currently
in negative territory, while 10-year yields are just 12 basis points above the
zero line, compared to 2.7% in the U.S. All eyes are going to be on German GDP
today to see if the country manages to escape a technical recession. Meanwhile,
the Eurozone economy is expected to have grown 0.2% in Q4.
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:
http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
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