Lukman Otunuga,
FXTM Research Analyst
Nigeria will
release updates on its inflation numbers in the week ahead, amid easing
concerns over slowing global growth and broad-based Dollar weakness. Market
players will be keeping a close eye on whether inflationary pressures have
cooled further in March, which will shape expectations over the Central Bank of
Nigeria’s (CBN) next potential policy move in the future. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Sentiment towards the nation’s economy
is likely to improve if inflationary pressures continue to ease. While the
Naira could be impacted by domestic economic data, the currency remains
influenced by external forces in the form of US-China trade developments,
global growth concerns, the Dollar’s valuation and Oil prices.
China showing further signs of stabilizing
Adding to the risk appetite seen in
early trade this week are China’s March external trade figures, which were
released at the end of last week and helped ease some of the concern over a
decline in the nation’s economic momentum. China’s exports for the month
surprised to the upside, suggesting that global demand for trade remains intact
and that the Chinese economy will find solid footing as a result.
China’s Q1 GDP, as
well as March’s industrial production and retail sales data, are all due for
release on Wednesday. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html These will be treated as tier-one
economic releases from China and the data should offer further indication as to
how the world’s second largest economy is holding up. Note that the IMF
recently revised China’s forecasted growth higher, in contrast to the lower
projections for global growth.
Should the “China stabilizing”
narrative gather momentum, complemented by evidence of stimulus measures
feeding into China’s economy in the months ahead, this should offer room for
more gains in emerging market assets over the near-term.
Dollar steadies as markets await latest US data
The United States is also slated to
announce its March industrial production and retail sales data this week, along
with the latest Markit Purchasing Managers Index (PMI). Markets are expecting
the US economy to showcase its resilience, especially for retail sales, which
are hoping to rebound following February’s slump.
However, any data
announcement that undershoots market expectations will be seen as a threat that
will weigh negatively on the Dollar Index. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Given the Federal Reserve’s already
dovish tone, further hints of a steeper slowdown in the US economy could hasten
speculation of a Fed rate cut and may give Dollar bears reason to break the
Greenback’s recent resilience around the 97 mark.
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