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*Data as of 6pm WAT
Market News
Local
Forex scarcity stalls fresh petrol importation - Punch
Oil marketers with fuel import licenses in Nigeria are facing difficulties accessing foreign exchange, hindering their ability to import petrol. Only three of the six licensed companies will begin importation this month due to high exchange rates and forex scarcity.
Global
Fed minutes reveal more rate hikes ahead, but at a slower pace - CNBC
Federal Reserve officials indicated a likelihood of further tightening, but at a slower pace than before. They decided against a rate rise in June due to concerns over economic growth. Officials expressed the need for more time to assess the impact of previous rate increases and the economy's progress.
China named a new central bank chief - Financial Times
Pan Gongsheng has been appointed as the new Communist Party chief of the People's Bank of China, potentially becoming the next governor. He brings a wealth of experience in the commercial banking sector and will take over from Guo Shuqing. His appointment comes during a critical period for the Chinese economy, with pressure for stimulus measures and efforts to stabilize the yuan.
Chinese rush to buy Hong Kong insurance and dollars as confidence declines - Reuters
Chinese investors are increasing their offshore investments by making dollar deposits and purchasing Hong Kong insurance, indicating waning domestic confidence and putting further pressure on the yuan. Mainland Chinese holdings in Hong Kong and Macau wealth products have more than doubled, while new premiums collected on Hong Kong insurance policies surged.
Meta launched 'Twitter Killer' Threads app - Reuters
Meta's new app Threads launched as a direct challenge to Twitter, attracting millions of users in hours. With ties to Instagram, the app offers a potential advertising advantage and aims to create a less toxic version of Twitter.
Saudi Arabia set to launch multibillion-dollar sports investment group - Financial Times
Saudi Arabia plans to launch a multibillion-dollar sports investment group as part of its sovereign wealth fund, following its recent involvement in US golf and English football. The move has generated controversy due to concerns over the kingdom's human rights record.
ChatGPT's explosive growth shows first decline in traffic since launch - Reuters
ChatGPT, the popular AI chatbot, experienced a decline in website traffic and unique visitors in June for the first time since its launch. The slowdown suggests waning novelty, with demand shifting towards generative AI with real-time information. OpenAI did not comment on the matter.
June’s FOMC minutes were released yesterday—here are the main takeaways:
Almost all participants agreed with last month’s pause, but some division is starting to arise.
It may be more difficult for Powell to keep the FOMC united in the coming months.
Almost all see additional rate increases as appropriate.
They still see a mild, two-quarter recession starting in Q4.
Student loan debt holders are getting a lifeline, albeit a temporary one.
According to the Consumer Financial Protection Bureau, 20% of borrowers may struggle once payments resume.
The Biden administration announced new provisions giving borrowers more flexibility.
From October 1 to September 30, 2024, borrowers will be protected from severe consequences if they fall behind on payments.
Organization of Petroleum Exporting Countries: “Help wanted”.
OPEC is actively recruiting new members.
Countries recently visited by the group’s secretary-general include Malaysia, Brunei, Azerbaijan, and Mexico.
To join, members must be net exporters of oil and have goals aligned with those of OPEC (i.e., keep oil prices high).
Weekly Investment Watchlist
Market Commentary
Asia and Australia
Hong Kong-listed Chinese banking shares sharply lower Thursday with Hang Seng Mainland Banks Index down 6.5% as Goldman Sachs downgraded top mainland banks and on reports Chinese banks have stopped buying bonds issued by Shanghai Free Trade Zone
Malaysia central bank holds steady on rates at 3% as the Malaysian Ringgit recovers
Chinese investors rush offshore to make dollar deposits, buy Hong Kong insurance amid a weakening yuan
RBA to raise cash rate to 4.35% in August while economists split on when rate would peak, poll shows
Japan’s shunto wage negotiations showed an average pay raises of 3.58%, notably up 1.51% from last year's talks, marking the highest increase since the 3.90% awarded in 1993. This is a positive sign for the country and one of the issues that’s influencing monetary policy decisions.
Europe, Middle East, Africa
Big beat in German factory orders in May, which rose 6.8% m/m versus consensus 1.2% and compared with prior 0.4% drop.
UK: Market rate expectations continue to steepen with peak rate pricing now at 6.5% for March 2024. A lot attention on JP Morgan research earlier this week highlighting risk that the BoE might have to hike rates to 7%. UK sold two-year Gilts yesterday at the highest level since June 2007 at 5.668%. - this gives the GBP a boost.
May Eurozone retail sales at 0% m/m vs consensus of +0.2% and prior at 0.0%. On a y/y basis, the print came in at (2.9%) y/y vs consensus (2.7%).
Over a third of UK homes dropped in value in the last six months, as reported by the property portal Zoopla
The Americas
NY Fed President Williams says more work needed on reducing inflation to 2%
Exxon flags $4B earnings hit from lower natural gas prices and refining margins
Bank of America plans to increase its quarterly common stock dividend by 9% from Q3 after Fed stress test
S&P 500 earnings expected to decline 6.8% y/y in Q2, the worst performance since Q2 of 2020. However, bar going into earnings season looks higher when considering revision activity.
Investment Tip of The Day
Prepare for potential job loss: Build an emergency fund that can sustain you in case of job loss or unexpected unemployment. Having a financial cushion will provide peace of mind and help you navigate any temporary setbacks.
Meme of the Day
