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Jumia Food to exit Nigeria by end of 2023 - Punch
Jumia will cease operations for its food delivery service, Jumia Food, in all of its operational countries, which include Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria by the end of December 2023.
Kyari defends NNPCL fuel import monopoly - Punch
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, has defended the company’s current monopoly in fuel import, arguing that oil marketers withdrew from fuel importation due to price volatility.
Exchange rate, inflation will decline in 2024 - CBN - DailyPost
The Central Bank of Nigeria, CBN, said on Thursday that inflationary trends and exchange rates will be on a downward spiral in 2024.
Middle East and Africa deal activity falls 26% on geopolitical tensions - ACE Times
Deal activity in the Middle East and Africa fell 25.7% year-on-year (YoY) between January and November 2023, London-based GlobalData said in a new report. Overall, global deal activity declined 23.6% YoY due to macroeconomic challenges and persistent geopolitical tensions, it added.
NOVEMBER'S INFLATION HIGHLIGHTSHeadline inflation increased to 28.20% YoY in November 2023; 0.87% higher than 27.33% recorded in October 2023.
MoM, headline inflation increased to 2.09% in November 2023; 0.35 higher than 1.73% recorded in October 2023.
Food inflation inched up by 32.84% YoY in November 2023; 1.32% higher than 31.52% recorded in October 2023.
MoM, food inflation increased to 2.42% in November 2023; 0.51 higher than 1.91% recorded in October 2023.
Core inflation printed at 22.38% YoY in November 2023; 0.19% lower than 22.58% recorded in October 2023.
MoM, core inflation printed at 1.53% in November 2023; 0.14 higher than 1.39% recorded in October 2023.
Global
Congress passes $886B defense policy bill - CNBC
The US House passed a $886 billion defense bill, NDAA, after bipartisan support. It includes record military spending, aid for Ukraine, pushback against China, and a Section 702 extension. Divisive social issues were removed, but Ukraine aid remains small compared to Biden's request.
Federal Reserve Meeting: Fed Signals Rate Cuts in 2024 - New York Times
The Federal Reserve kept interest rates steady for the third time but signaled three cuts in 2024, sending markets soaring. The "soft landing" forecast boosted investor sentiment, pushing the Dow to a record high and the S&P 500 near its peak. Powell spoke about the elusive "neutral rate" and hinted at possible shifts in the economy.
Global Market Commentary
Overview
The post-FOMC squeeze across rates markets was quelled by less dovish outcomes from both BoE and ECB. These helped EUR and GBP extend their gains against a fragile USD. Today’s data calendar features China November retail sales and industrial production plus flash December PMIs in various jurisdictions, notably Europe and the US.
Currencies/Macro:
The US dollar faced renewed pressure after the ECB and Bank of England meetings, declining against all G10 FX on the day.
EUR and GBP rose approximately 1.0% to 1.1000 and 1.2765, respectively, with USD/JPY extending as low as 140.97 in Asian trade.
US November retail sales exceeded estimates, with headline sales rising +0.3%m/m and the ‘control group’ rising +0.4%m/m. Downside revisions to October largely offset the upside surprise.
US weekly jobless claims continued to show solid labor market conditions (initial claims of 202k, continuing claims 1.876mn).
The ECB left policy unchanged, lowering inflation profiles for 2023 and 2024. The BoE maintained a staunch stance with a 6:3 vote to leave policy on hold at 5.25%. Norges Bank announced an effective dovish hike, raising their key rate to 4.5%.
The Swiss National Bank left rates unchanged at 1.75%, citing downside risks from lower growth abroad but maintaining the intention to intervene in FX.
Interest Rates:
The US 2yr treasury yield declined another -5bps on the day to 4.38%, and 10yr yields slipped another -9bps on the day to 3.92%.
Commodities:
Crude markets rebounded from 5-month lows, supported by the risk-on move, a slump in the US$, and expectations of aggressive rate cuts next year.
Metals rallied strongly in a delayed reaction to the FOMC outcome. Copper is up 2.4% to $8,531, while aluminum burst 3.3% higher to $2,210.
Iron ore markets marked time despite the sharp move lower in the US$ and risk-on move.
Day Ahead:
US -
Flash December S&P Global PMIs worldwide are anticipated to provide insights into economic activities, with the Eurozone version being particularly market-sensitive.
In the UK, December S&P Global PMIs are expected to report persistent weakness in manufacturing activity, while the services measure likely holds just above the 50 expansion/contraction level.
In the US, the New York Fed’s Empire State manufacturing index is expected to deteriorate in December, and December S&P Global US PMIs are anticipated to provide evidence of the weakness and fragility of US manufacturers as the service sector edges higher.
Eurozone -
Flash December S&P Global PMIs in the Eurozone are expected to edge higher to slightly less contractionary reads. UK December S&P Global PMIs are also expected to be published.
GfK UK consumer sentiment is likely to remain weak in December.
The Week Ahead:
Monday:
Tuesday:
S consumer price inflation rose 0.1% month-on-month
Wednesday:
UK GDP fell by 0.3% in October
US Core PPI m/m was unchanged in November
US Federal Reserve held interest rates at 5.50% steady for a third meeting
Thursday:
UK Official Bank Rate maintained at 5.25%
EA Main Refinancing Rate remain unchanged at 4.50%
US retail sales rise by 0.3% in November
US Unemployment Claims fell to 202,000, a decrease of 19,000 from the previous week's revised level of 221,000
Friday:
UK Manufacturing PMI decreased to 46.40 points in December
UK flash services PMI came in at 52.7 vs 51.0 expected
Empire State Manufacturing Index dropped 24 points to -14.5 from +9.1 in November.
Flash Manufacturing PMI (US)
Flash Services PMI (US)
Investment Tip of The Day
Assess Emerging Market Currency Risks: In addition to general emerging market risks, evaluate the specific risks associated with currency fluctuations in the countries where you hold investments.
Service Spotlight of the week - Advisory Services
Meme of the Day
