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Market News
Local
Court Orders Federal Gov’t To Fix Price Of Goods In 7 Days - Leadership
Nigerian court orders government to fix prices of essential goods within 7 days due to rising costs. Judge granted lawyer's request as government failed to respond to lawsuit citing Price Control Act. Prices to be set for milk, flour, salt, sugar, fuel, vehicles, motorcycles, and more.
Bank Of Industry To Disburse N200bn To MSMEs, Others - Daily Trust
Nigerian government appoints Bank of Industry to distribute a N200 billion fund supporting businesses. This includes a N50 billion grant for nano businesses like traders, artisans, and creatives, targeting 1,000 beneficiaries per local government area.
NNPC, Others Begin Production Of Oil From Akpo West Field - Daily Trust
Nigeria's Akpo West oil field starts production, adding 14,000 barrels per day. Led by TotalEnergies with NNPC involvement, the project leverages existing infrastructure for cost-efficiency and reduced emissions. This marks a significant step in optimizing the nation's oil and gas assets.
Senate gives Edun seven-day ultimatum on N100bn gas project - Punch
Senate investigates N100bn gas project amid concerns over lack of transparency and potential violations of procurement laws. They demand details from Finance Minister and express disapproval of further N130bn spending without proper budget approval.
Government approval delays Dangote refinery fuel - Punch
Dangote Petrochemical Refinery's plan to release aviation fuel (Jet A1) and diesel in Nigeria by January faced delays due to ongoing regulatory approvals. The refinery, Africa's largest, began petroleum product production on January 12, but as of February 7, the necessary regulatory processes had not been completed.
NNPCL begins 14,000bpd condensates production from Akpo field - Punch
The Nigerian National Petroleum Company Limited has successfully started producing 14,000 barrels per day of condensates from the Akpo West Field, following President Tinubu's directive. The milestone leverages existing infrastructure and aims to add four million cubic meters of gas per day by 2028.
Global
Google launches Gemini Advanced with Ultra 1.0 - CNBC
Google has rebranded its AI chatbot, Bard, as Gemini, unveiling a new app and subscription options. The move signals Google's commitment to AI assistants, with plans to expand capabilities. Gemini Ultra 1.0, Google's most powerful AI model, is now available through a $19.99 monthly subscription via Google One.
Market Commentary:
Overview:
Sentiment in Europe leaned towards softness, but US equity markets saw an optimistic tone, with the S&P500 reaching another record high at the close. Bond yields experienced volatility influenced by regional bank news and a substantial Treasury auction. The current light calendar includes China's January CPI and US weekly jobless claims.
Currencies/Macro:
The US dollar showed mixed performance against G10 FX, with minor net changes.
EUR/USD rose 0.2% to 1.0775.
The Swiss franc was the weakest in the G10, down 0.5% to 0.8740, amid reports of potential FX intervention by the Swiss central bank.
GBP/USD increased by 0.2% to 1.2625.
USD/JPY initially dipped to 147.63 on falling Treasury yields but later recovered to 148.20, netting +0.2%.
Interest Rates:
Bond markets showed resilience amid significant supply, including Belgium's issuance of EUR5bn for a new 30yr bond.
The focus was on the successful record-sized USD42bn 10yr UST auction.
The US 2yr treasury yield fluctuated between 4.36% and 4.43%, ending 3bp higher at 4.43%. and the 10yr yield varied between 4.06% and 4.13%, concluding 2bp higher at 4.11%.
Markets assign a 15% chance of a Fed funds rate cut in March and an 80% chance by May, with the current rate at 5.375% (mid).
Credit spreads reflected regional outcomes: Main widened by half a bp to 60, CDX tightened by half a bp to 55, and US IG cash remained little changed (+/-1bp).
In Europe, 6 issuers priced EUR6.75bn, while in the US, 7 issuers priced USD13.2bn, with post-earnings supply continuing from corporates.
Commodities:
Crude prices rose due to the Israeli PM's rejection of a Hamas peace proposal and a significant drop in refined product stockpiles.
March WTI contract increased by 1% to $74.04, and April Brent rose by 0.95% to $79.34.
Israel PM Netanyahu expressed confidence in reaching total victory in Gaza, rejecting the latest offer from Hamas.
EIA reported a larger-than-expected crude build, but gasoline and distillate stocks saw significant declines.
Crude inventories rose due to Gulf Coast refinery maintenance and the Texas freeze impact.
Gasoline stock draw led to the Nymex RBOB crack spread's rise to the highest since September.
Heating oil/gasoil futures surged, with the February European gasoil contract up 3.6%.
Metals markets experienced a decline as China's attempts to support the stock market seemed to lose momentum.
Copper was down 1.1% at $8,308, and zinc fell 0.95% to $2,409.
Copper exports from the Democratic Republic of Congo (DRC) jumped 17% in 2023.
Peru produced a record 2.76mt of copper in 2023, up 12.7% from 2022.
China proposed a $1bn plan to refurbish a key railway line connecting Zambia's copper heartland with the port of Dar es Salaam.
Iron ore markets showed mixed trends, with Fitch forecasting weak Chinese steel and cement output in Q1.
March SGX contract rose by $1.65 to $126.65, while the 62% Mysteel index fell by 25c to $126.00.
Chinese regulators urged banks to meet developers' funding demands to support the property market.
Day Ahead:
US:
Growth in consumer credit is expected to retrace from its year-end burst in January (market f/c: $15.9bn).
Initial jobless claims are anticipated to remain at a relatively low level (market f/c: 220k).
Richmond Fed president Barkin is scheduled to speak.
Eurozone:
The Week Ahead:
Monday:
Tuesday:
US The ISM Services PMI jumped to 53.4 in January 2024 from 50.5 in December, beating forecasts of 52
Wednesday:
Thursday:
US initial jobless claims down by 9,000 to 218,000
Friday:
Investment Tip of The Day
Stay Mindful of Political Gridlock Risks: Political gridlock can impact policy implementation. Assess the potential risks and opportunities for your investments in periods of political deadlock.
Service Spotlight of the week - Advisory Services
Meme of the Day
