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Inflation, Naira devaluation drive money supply to N66.4trn - The Sun
Inflation and naira devaluation have contributed to a surge in Nigeria's money supply to ₦66.4 trillion. The devaluation of the naira resulted in an increase in the supply of money, which reached its highest level in years. In addition to the naira devaluation, inflation has played a significant role in driving money supply growth in the country.
Reps Query N7trn, Other Intervention, In Power Sector, Plan Investigation - Leadership
Nigerian lawmakers are scrutinizing the disbursement of ₦7 trillion in additional interventions in the power sector. The House of Representatives has initiated an investigation into how these funds were allocated and spent. The aim is to ensure transparency and accountability in the use of these substantial funds, particularly in a sector as critical as power.
FG secures €1m EU grant for nuclear project - Punch
The Nigerian government has secured a €1 million grant from the European Union to support a nuclear project. The grant will aid in advancing the country's nuclear power program. Nigeria is actively exploring nuclear energy as a means to diversify its energy sources and meet the growing electricity demand in the nation.
Global
Morgan Stanley names Ted Pick as next CEO - WSJ
Ted Pick, a banking veteran who has been co-president of Morgan Stanley for the past two years, will take over as the CEO of the company starting on January 1, succeeding CEO James Gorman, who will remain as executive chairman of the board. Pick expressed his deep honor in leading the institution.
Biden moves to embrace AI as national security tool in executive order - WSJ
Anticipated for the upcoming week, President Biden is set to authorize an executive order that tackles the swift progress of artificial intelligence. This move will establish the foundation for the U.S. government to embrace AI as a component of national security strategies, all the while urging companies to prioritize the safe development of this technology.
U.S. GDP grew at a 4.9% annual pace in the third quarter, better than expected - CNBC
The U.S. economy grew 4.9% in Q3, surpassing expectations, driven by strong consumer spending despite inflation and other challenges. Economists anticipate a slowdown ahead, and the Fed is not expected to raise interest rates soon.
10-year Treasury yield hovers near 5% after strong GDP report - CNBC
The 10-year U.S. Treasury yield, near 5%, was influenced by a strong Q3 GDP report showing a 4.9% rise, exceeding expectations. Yields rose significantly in recent months. Despite this, jobless claims suggest a potential economic slowdown. The Federal Reserve is expected to maintain current interest rates after this strong GDP reading, as they aim for a 2% inflation target.
Weekly Investment Watchlist
Market Commentary:
Asia and Australia:
Asian equities ended mostly lower on Thursday. South Korea’s Kospi underperformed as its chip and media-entertainment stocks experienced a sell-off. Japanese benchmarks returned to two-week lows. The main benchmarks in Australia, New Zealand, Thailand, Indonesia, and the Philippines were either at or near 52-week lows.
The Hang Seng came close to a 52-week low before bouncing back and holding the 17,000 level. Mainland China markets saw slight gains. However, India witnessed sharp losses, and Vietnam notably underperformed, with a decline of more than 5%.
RBA Governor Bullock commented before the Senate Economics Legislation Committee, stating that the Q3 CPI was about where policymakers expected it to be. They are still considering whether it constitutes a “material” change to the inflation outlook. This comment follows concerns regarding the Australian housing market, which might cause the RBA to reconsider a rate hike in November.
South Korea’s Q3 GDP grew 0.6% quarter-on-quarter, surpassing the consensus of 0.5% and consistent with the previous quarter’s 0.6% growth. The highlight was a sharp rebound in exports. However, the contribution of external demand was curbed by a comparable recovery in imports. Private consumption also rebounded moderately after a sharper decline in Q2. Unfortunately, despite this positive news, the South Korean market was down more than 2% on the same morning.
In an emergency move, the Philippines Central Bank raised its target rate by 25 basis points to 6.5% effective immediately. This rare off-cycle decision was made as a warning that they would increase rates again at their regular meeting next month if prices don’t stabilize. This decision is seen as a concerning sign for global markets.
The devaluation of the Yuan in China is causing capital outflows. Data from SAFE (State Administration of Foreign Exchange) shows a net outflow of $53.9 billion in September, marking the largest since January 2016.
Europe, Middle East, Africa:
The BTP-Bunds spread is under the spotlight as rating agencies assess Italy’s fiscal plans. Investors are becoming increasingly sensitive to Italy and its spread over German Bunds, which has crossed the psychological level of 200 basis points (bp). The spread is also influenced by global factors impacted by the rise in real rates and a bond selloff in the long end. However, the level and speed/volatility of BTP spread movements are nowhere near the levels seen in 2022 or even during the 2011/2012 eurozone crisis. Rating agencies will offer updated assessments of Italy’s fiscal plans in the coming weeks, making it a key area to monitor.
Siemens is trading at all-time lows below €8 per share after confirming press reports indicating that the company was in talks with the German government to secure state aid. Banks are reluctant to extend guarantees due to the high losses accumulated for years at Siemens’ wind power subsidiary.
Shell is cutting 200 clean energy jobs and scaling back its hydrogen business.
The Americas:
The Bank of Canada (BoC) held rates steady at 5%. The governing council expressed concern over the slow progress and increased inflationary risks. They indicated readiness to raise the policy rate further if necessary. The Canadian dollar experienced a sharp decline after the BoC rate decision, while equities recovered from their worst levels at the opening on Wednesday. The next scheduled BoC meeting is on December 6, with the next quarterly Monetary Policy Report set to be published on January 24.
New home sales in September increased by 12.3% to a rate of 759,000, surpassing the consensus estimate of 680,000. This represents the fastest pace since February 2022. The September figures also reversed the 8.2% decline recorded in August to a pace of 676,000 (revised upward by 1,000). Although inventories contracted to a 7.3 months’ supply at the current pace, the median sales price declined to approximately $419,000 from August’s level of around $433,000.
The Week Ahead:
Monday:
Tuesday:
US Flash Manufacturing Purchasing Managers' Index (PMI) was slightly higher than forecast, at 50 versus 49.5
Wednesday:
UK Consumer Price Index rose by 6.3%
Thursday:
Advance GDP (US)
Unemployment Claims (US)
Friday:
Core PCE Price Index m/m (US)
Revised UoM Consumer Sentiment
Investment Tip of The Day
Assess Counterparty Risk in Derivatives: When trading derivatives, evaluate counterparty risk. Ensure that the entities with which you engage in derivative contracts are financially sound and reliable.
Meme of the Day
