Finance Friday
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Market Data
Local
Global
*Data as of 6pm WAT
Market News
Local
12 deep offshore oil blocks up for sale in 2024 (NUPRC) - Business News Report
Nigerian Upstream Petroleum Regulatory Commission, NUPRC said it has concluded plans to sell 12 deep offshore oil blocks in 2024 as part of measures targeted at increasing investment that will ultimately raise Nigeria’s oil reserves toward 40 billion barrels, from the present 37 billion barrels
No plan to exit Nigeria, says Shell - Punch
Shell PLC has denied speculations that it was leaving Nigeria after selling its onshore business in the Niger Delta.
Global
Google to invest $1B in new UK data center to meet demand - Bloomberg
Google to invest $1 billion in new UK data center outside London, meeting growing demand for internet services. British government welcomes the investment as a boost to tech and AI industries. Project follows Google's recent London office purchases and Microsoft's similar data center investment in UK.
Moody's revises Egypt's outlook to 'negative' on weak debt affordability - Zawya
Global ratings agency Moody's revised its outlook on Egypt to "negative" from "stable" on Thursday, citing increasing risks that the country's credit profile will continue to weaken amid difficult macroeconomic and exchange rate rebalancing
Market Commentary:
Overview:
Following positive US jobless claims data, there was a slight rise observed in both bond yields and the US dollar. Notably, US and European equities saw an increase, signifying the first upward movement of the week.
Currencies/Macro:
US dollar had a mixed performance against G10 FX.
EUR/USD dropped 15 pips to 1.0865, GBP/USD dipped after US jobless claims but later gained to 1.2690.
USD/JPY remained net flat at 148.20.
AUD outperformed G10, up 0.3% at 0.6575.
US weekly jobless claims indicated a robust labor market.
Initial claims fell to 187k, continuing claims to 1.806m.
Housing starts in December fell -4.3%, building permits rose 1.9%.
Philadelphia Fed business survey index rose to -10.6 in January.
Atlanta Fed president Bostic urged caution on interest-rate cuts.
ECB minutes expressed concerns about market pricing of rate cuts.
Interest Rates:
US 2yr treasury yield fell 5bp to 4.31%, then bounced to 4.38%.
10yr yield rose a net 4bp to 4.14%.
Markets expect the Fed funds rate to be unchanged on February 1, with a 50% chance of a cut in March.
Australian 3yr government bond yields rose from 3.80% to 3.82%, 10yr yield rose from 4.25% to 4.31%.
RBA cash rate likely to remain unchanged on February 6.
New Zealand rates market predicts OCR to be unchanged on February 28, with a 70% chance of a rate cut by May.
Main tightened to 61, CDX improved to 56.
US cash credit tightened by 1-2bp.
Commodities:
Crude markets rose due to the Middle East conflict and a bullish EIA inventory report.
WTI contract at $74.01, Brent contract at $79.05.
EIA reported crude inventory down 2.49mb, gasoline stocks rose, distillate also increased.
Gas markets fell in Asia to a 7-month low.
The freeze in Texas and Louisiana disrupted US LNG exports.
Copper up 0.5% to $8,312, nickel up 0.57%.
Aluminium down 0.5% at $2,168, nearly 10% lower than late December highs.
Signs of plant closures in the aluminum industry.
Recovered ground with the February SGX contract at $127.55, 62% Mysteel index at $130.15.
Despite weak steel production in China, iron ore prices rose.
Day ahead:
Eurozone:
UK retail sales volumes for December expected at -0.5%mth.
US:
Fed officials Goolsbee, Daly, and Barr to speak ahead of the FOMC’s January 30-31 meeting.
January’s University of Michigan consumer sentiment expected to remain downbeat.
December existing home sales likely to have struggled, and US Treasury data on November capital flows are to be released
The Week Ahead:
Monday:
Tuesday:
US Empire State Manufacturing Index fell twenty-nine points to -43.7
UK unemployment at 4.2% in the quarter to December
Wednesday:
UK Consumer Prices Index (CPI) rose by 4.0% in the 12 months to December 2023, up from 3.9% in November
US core retail sales MoM came in at 0.4% vs 0.2% exp and 0.2% previously;
Thursday:
US Unemployment Claims came in at 187,000, a decrease of 16,000 from the previous week's revised level.
Friday:
UK retail sales down 2.4% in December
Prelim UoM Consumer Sentiment (US)
Investment Tip of The Day
Stay Informed About Anti-Money Laundering Efforts: Assess the effectiveness of companies' anti-money laundering efforts, especially in financial services. Inadequate controls can lead to legal and reputational risks.
Service Spotlight of the week - Advisory Services
Meme of the Day
