The major risk event for the Nigerian economy will be the Manufacturing and Non-Manufacturing PMI reports for March that are being released on Wednesday and which should offer fresh insight into the health of the nation’s economy.
Manufacturing
PMI is projected to rise to 57.6 in March, while Non-Manufacturing will rise to
59.0 during the same month. A steady expansion in both PMI reports is likely to
boost confidence over Nigeria’s economic recovery as the second quarter of 2019
gets underway.
Bitcoin back in
the limelight as prices surge above $5000
Bitcoin
was one of the main talking points across financial markets today after
suddenly climbing to its highest level since November 2018 above $5000.
While
sudden and explosive swings are nothing new in the world of cryptocurrency,
Bitcoin has certainly struggled for direction in recent months as investors
evaluated the possibility of its adoption by the mainstream. Although the
reason behind Bitcoin’s aggressive 23% jump remains a mystery, it does suggest
that bulls could be back in town. In regards to the technical picture, BTCUSD
turned bullish on the daily charts after prices rallied from $4200 to just
above $5100. With prices trading above the 200 Simple Moving Average and the
MACD trading to the upside, lagging indicators suggest that Bitcoin has the
potential to push higher. A solid daily close above $5000 will be needed to
seal the deal for bulls. Alternatively, if $5000 proves to be a reliable
resistance, Bitcoin has scope to retest $4500.
Currency
spotlight – GBPUSD
Sterling
remained bruised and depressed on Tuesday after UK lawmakers rejected all
alternative Brexit options for a second time.
This
unfavorable development has created another element of uncertainty and
confusion over Brexit at a time where investors are desperately seeking
clarity. The United Kingdom now has until April 12 to either seek a longer
extension from the EU, agree on an alternative Brexit plan or leave the EU
without a deal in place. Market fears of the UK crashing out of the EU with no
deal is likely to weigh heavily on the Pound and this was reflected in the
GBPUSD.
Taking
a look at the technical picture, the GBPUSD is coming under pressure on the
weekly charts. A breakdown below 1.3000 is seen opening a path lower towards
the 1.2890 regions.
USDZAR hovers
above 14.14
The
Rand entered the second quarter of 2019 on a firm footing after Moody’s delayed
its credit rate decision on South Africa. Positive data from the United States
and China also supported appetite for emerging market currencies, with the Rand
falling into this category.
Although
the local currency weakened on Tuesday, this has more to do with an
appreciating Dollar rather than a change in overall sentiment. If risk
sentiment continues to improve on easing global growth fears and domestic data
shows signs of stabilizing, the Rand has the potential appreciate against the
Dollar. In regards to the technical picture, the USDZAR is likely to test 14.00
if the 14.14 level is conquered.
Commodity
spotlight – Gold
An
appreciating Dollar and improvement in risk sentiment have reduced appetite for
safe-haven Gold.
Positive
economic data from China and the United States has eased investor concerns over
slowing global growth, with equities and riskier assets back in focus. While
Gold has the potential to sink further in the near term, the medium to longer
term outlook remains in favor of bulls. Geopolitical risks in the form of
Brexit, uncertainty over US-China trade talks and a dovish Federal Reserve are
likely to continue supporting Gold. Focusing on the technical picture, the
precious metal is likely to test $1280 in the near term. For bulls to jump back
into the game, prices need to break back above the psychological $1300 level.
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