Money Monday
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Market Data
Local
Global
x*Data as of 4pm WAT
Market News
Local
Naira falls to all-time low on I&E window, hits N1,099/$ - Punch
Within the day, the national currency began trading at N844.10/$ before closing at N1099.05/$. Since June, the naira has lost more 40 per cent of its value adding to inflationary pressure in the country.
COP28: Outrage greets OPEC’s ‘leaked letter’ to Nigeria - Businessday NG
Leaders from Germany, Spain and France reacted angrily after the Organisation of Petroleum Exporting Countries (OPEC) called on Nigeria and its other members to oppose any fossil fuels deal at COP28 — the United Nations Climate Change Conference taking place in Dubai.
Moody's upgrades outlook on Nigeria to positive - Nigeria Business News Ratings agency Moody’s on Friday revised its outlook on Nigeria to positive from stable, citing possible reversal of the deterioration in the country’s fiscal and external position due to authorities’ reform efforts.
GLAXO SMITHKLINE CONSUMER NIG. PLC.-POST COURT ORDERED MEETING RESOLUTIONS CORPORATE ACTIONS DECEMBER 2023 - PDF
Global
US seeks to buy up to 3M barrels of oil for Strategic Petroleum Reserve - Reuters
The US Department of Energy is seeking to buy 3 million barrels of crude oil for the Strategic Petroleum Reserve. This is part of their plan to replenish the stockpile, taking advantage of lower oil prices. This comes after they sold 180 million barrels from the reserve last year to limit the oil price rally caused by the war in Ukraine.
Global Market Commentary
Overview
A robust US November employment report contributed to a surge in US yields, while a decline in consumer inflation expectations reinforced expectations of potential easing by the Federal Reserve.
Currencies/Macro:
The US dollar demonstrated strength against all G10 currencies except the Canadian Dollar (CAD) on Friday, buoyed by positive data and a rebound against the Japanese Yen (JPY). Notable currency movements included a volatile EUR/USD closing at 1.0762 (-0.3%), GBP finishing at 1.2550 (-0.35%), and USD/CAD hovering around 1.3580. AUD/USD started the week around 0.6570 after being at 0.6600 pre-Non-Farm Payrolls (NFP). NZD/USD slipped approximately 0.9% to 0.6120, with AUD/NZD up 40 pips at 1.0745.
US November non-farm payrolls increased by 199k (consensus 185k), though revisions resulted in a combined -35k downward adjustment for the prior two months. The unemployment rate declined to 3.7%, underemployment reduced to 7.0%, and the participation rate ticked up to 62.8%. Average weekly hours worked rose to 34.4, while average hourly earnings remained unchanged at 4.0% y/y.
Preliminary December consumer sentiment in the US (University of Michigan) strengthened to 69.4 (est. 62.0), with higher expectations and improved current conditions. Inflation expectations surprised, with 1-year and 5-10 year expectations pulling back.
UK November BoE/Ipsos 12-month Inflation Expectation decreased to 3.3% (prior 3.6%).
German final November CPI remained unchanged from preliminary levels, with headline CPI at 3.2% and EU harmonized at 2.3%.
Interest Rates:
The US 2yr treasury yield bounced from 4.63% pre-data to 4.72%, while 10yr yields firmed from 4.18% pre-NFP to 4.225%. Despite no expected move in this week’s FOMC meeting, March 2024 pricing reduced to around 70% for a cut, and December 2024 Fed pricing decreased by approximately 16bps to -111bps or 4.22%.
Credit spreads remained firm, with Main slightly tighter at 66.5, CDX in a bp to 61.5, and US IG cash 1-3bp better due to underlying sentiment and limited primary activity.
Commodities:
Crude markets experienced a small bounce on Friday, with the US DoE announcing a purchase of 3mmb of crude for March delivery. The Venezuelan President’s threat to annex a disputed oil region and Europe’s potential influx of US diesel were noteworthy developments.
Metals ended the week positively, with copper bouncing 1.15% to $8,438, and nickel up 1.8% to $16,805. Iron ore markets closed on a high, with the Politburo meeting contributing to increased sentiment.
Day Ahead:
US: Commencement of a significant week for central bank meetings.
Eurozone: Release of December’s Rightmove house prices, anticipated to be near recent lows.
The Week Ahead:
Monday:
Tuesday:
Core CPI m/m
Wednesday:
GDP m/m (UK)
Core PPI m/m (US)
Federal Funds Rate (US)
FOMC Economic Projections (US)
Thursday:
Official Bank Rate (UK)
Main Refinancing Rate (EU)
Core Retail Sales m/m (US)
Unemployment Claims (US)
Friday:
Flash Manufacturing PMI (UK)
Flash Services PMI (UK)
Empire State Manufacturing Index (US)
Flash Manufacturing PMI (US)
Flash Services PMI (US)
Investment Tip of The Day
Monitor Intellectual Property Protection: For technology and innovation-focused investments, assess how well companies protect their intellectual property. Legal disputes or breaches can pose risks to future earnings.
Service Spotlight of the week - Wealth Management
Meme of the Day
