Finance Friday
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Market Data
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*Data as of 4pm WAT
Market News
Local
Cardoso gets Senate nod as Chairman of CBN MPC with 11 other as members - BNR
The Nigerian Senate has endorsed the nomination of Olayemi Cardoso as the chairman of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN). The Senate also confirmed 11 others as members. The members are: Muhammad Sani Abdullahi, (CBN deputy governor), Bala M. Bello (CBN deputy governor), Emem Usoro (CBN deputy governor), Philip Ikeazor (CBN deputy governor), Lamido Yuguda, (DG Securities and Exchange Commission) and Jafiya Lydia Shehu, (Permanent Secretary, Ministry of Finance).
Nigeria’s GDP records 2.74% in 2023, slowest growth rate since 2020 - BNR
Nigeria’s Gross Domestic Product (GDP) grew by 2.74% in 2023, a slight drop from the 3.10% growth recorded in 2022. According to a report signed by Prince Adeyemi Adeniran, Statistician-General National Bureau of Statistics, the figure was the slowest growth rate since 2020 when the economy recovered from recession.
Afreximbank, FG sign $1bn MoU to support Healthcare Sector - BNR
Afreximbank and the Federal Ministry of Health and Social Welfare has signed a Memorandum of Understanding (MoU) to support the development of Nigeria’s healthcare sector under the Presidential Initiative for Unlocking Healthcare Value Chains (PVAC).
Senate confirms Cardoso, others as chairman, members of Monetary Policy Committee - Premium Times
The Senate on Thursday confirmed the Governor of the Central Bank of Nigeria, Olayemi Cardoso, as chairman of the Monetary Policy Committee (MPC). The upper legislative chamber also confirmed the appointment of deputy governors of the CBN and seven others as members of the MPC.
The CBN deputy governors are, Mohammed Abdullahi, Bala Bello, Emem Usoro, and Philip Ikeazor.
Global
Nvidia identifies Huawei as top competitor for the first time in filing - Reuters
Nvidia identified Huawei as a top competitor in several categories, including artificial intelligence chips, for the first time in a filing with the Securities and Exchange commission late Wednesday. The Santa Clara, California-based company said that China's Huawei competes in supplying chips designed for artificial intelligence such as graphics processing units (GPUs), central processing units (CPUs) and networking chips.
Bitcoin ETFs test investor commitment to gold-backed paper - Reuters
A surge of interest in bitcoin exchange-traded funds is prompting some investors to swap out holdings in gold-backed ETFs, although analysts and fund managers said they are unlikely t
Google pauses Gemini AI image generator after it created inaccurate historical pictures - CNBC
Google on Thursday said it is pausing its Gemini artificial intelligence image generation feature after saying it offers “inaccuracies” in historical pictures.
Users on social media had been complaining that the AI tool generates images of historical figures — like the U.S. Founding Fathers — as people of color, calling this inaccurate.
Reddit files to list IPO on NYSE under the ticker RDDT - CNBC
Reddit on Thursday filed to go public. Its market debut will mark the first major tech initial public offering of the year and the first social media IPO since Pinterest went public in 2019. The social media company, founded in 2005 by technology entrepreneurs Alexis Ohanian and Steve Huffman, has raised about $1.3 billion in funding and has a post valuation of $10 billion, according to deal-tracking service PitchBook.
Market Commentary:
Currencies/Macro:
The US dollar experienced volatility during the London and New York trading sessions but eventually stabilized, showing only minor net changes against the G10 currencies. The EUR/USD briefly surged past 1.0880 following the release of European PMIs but later retreated to 1.0820, ending the day unchanged. The GBP/USD modestly gained 20 pips to close at 1.2660, fluctuating between 1.2612 and 1.2709. Despite an increase in 2-year Treasury yields and a significant equity market rally, the USD/JPY saw a modest rise of 0.2% to 150.55.
The preliminary February S&P Global Eurozone manufacturing PMI declined to 46.1 from 46.6, while the services PMI outperformed expectations, climbing to 50.0 from 48.4, highlighting ongoing price pressures and elevated services wages.
In the UK, the preliminary February S&P Global services PMI remained steady at 54.3, mirroring January's figure. The manufacturing PMI also showed stability at 47.1, slightly up from January's 47.0. The report mentioned increasing optimism, emerging supply chain issues, and rising pricing pressures.
US weekly initial jobless claims came in at 201k, below the anticipated 216k and previous 213k, with continuing claims dropping to 1.862m. The preliminary February S&P Global manufacturing PMI increased to 51.5, though the services PMI dipped to 51.3, leading to a composite index of 51.4. The reports noted a moderation in employment growth, easing cost pressures, and improving supply chain conditions. January saw a 3.1% rise in existing home sales.
Fed Vice Chair Jefferson emphasized the need for caution in eventual rate cuts, warning against easing too significantly in response to inflation improvements, as it could jeopardize the progress towards price stability.
The ECB minutes expressed confidence in their stringent policy stance, anticipating a reduction in inflation forecasts in the upcoming March staff updates. They highlighted the risks associated with premature policy easing.
BoE Monetary Policy Committee (MPC) member Greene, known for her occasional hawkish stance, acknowledged positive trends in growth and services inflation but cautioned against the UK's ongoing supply constraints that could rekindle inflationary pressures. She advocated for more time and data to confirm CPI progress before considering policy easing.
Interest Rates:
The yield on the US 2-year treasury increased from 4.66% to 4.71%, with the 10-year yield fluctuating between 4.32% and 4.34%. Market expectations for the Federal Reserve's funds rate, which is currently at 5.375%, are to remain unchanged at the upcoming March meeting, but there is an 80% likelihood of a rate cut by June.
In the credit markets, both the Main and CDX indices tightened by approximately 2 basis points, reaching year-to-date lows of 54.5 and 50.5, respectively. The investment-grade cash market also saw improvement, with spreads tightening by 0 to 2 basis points. Primary market activity has been robust, particularly in the US, where investment-grade supply has surpassed USD 50 billion in just three days, totaling USD 53.4 billion. In Europe, three issuers have priced EUR 3.4 billion.
Commodities:
A surge in risk sentiment drove crude oil prices to fresh three-month closing highs, buoyed by signs of tightness in both the physical and refined products markets. The April West Texas Intermediate (WTI) contract increased by 0.76% to $78.50, and the April Brent contract rose by 0.7% to $83.60. According to the Energy Information Administration (EIA), crude stocks expanded by 3.51 million barrels, while distillate inventories declined by 4 million barrels. U.S. crude production remained steady at 13.3 million barrels per day, but exports surged to their highest level since mid-January, with expectations for further increases amid U.S. refinery maintenance. This marks the fifth consecutive decrease in distillate stocks, the largest drop since May of the previous year. The emergency shutdown of BP's Whiting refinery in February has likely contributed to the tightening of refined product markets, although a phased restart is anticipated starting March 1. Energy Aspects noted that Turkish terminal operator GTS has prohibited imports of Russian oil products, either directly or via ship-to-ship transfer, following media attention. Diesel is expected to be most affected, with the port of Dortyol handling significant volumes destined for EU countries.
In Europe, gas prices have hit new lows not seen since 2021. However, Bloomberg reported that Chinese LNG importers are exploring the spot market due to the price collapse in Asia, with Shenzhen Energy and China Gas Holdings reportedly negotiating for additional spot cargoes.
Metals saw mixed movements, with nickel climbing 2.8% to $17,400, marking a 6% increase over two days, and copper rising by 0.8% to $8,608. However, aluminium experienced a 0.8% decline to $2,201. Vale has been ordered to suspend operations at its Onca Puma nickel and Sossego copper mines for failing to meet environmental standards. This decision follows the forced shutdown of First Quantum's Cobre Panama copper mine in January.
Iron ore prices rebounded, crossing the $120 mark as Port Dampier preemptively cleared ships in anticipation of ex-Tropical Cyclone Lincoln's expected landfall. The March SGX iron ore contract was up $1.20 to $120.95, while the 62% Mysteel index increased by 65 cents to $120.70. Lincoln is forecasted to re-intensify into a tropical cyclone and affect the Pilbara region before moving south towards Perth, with Port Dampier, utilized by Rio Tinto, having cleared all anchorages by Thursday evening.
Investment Tip of The Day
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