Trading Thursday
Ranora Daily - Your daily source for reliable market analysis and news.
Market Data
Local
Global
*Data as of 6pm WAT
Market News
Local
W’Bank projects 3.7% growth for Nigerian economy 2025 - Punch
The World Bank in its latest report titled “Global Economic Prospect: Subdued Growth, Multiple Challenges”, projected that the African largest economy will improve by 3.3 per cent up from a projected 2.9 per cent for 2023.
Oil marketers seek tax relief - Punch
Oil marketers have appealed to the Federal Government to grant them tax relief to ameliorate their suffering due to the harsh economic conditions
NNPCL, FG will now remit dollar revenue to CBN (Cardoso) - Punch
The Nigeria National Petroleum Corporation Limited and the Ministry of Finance have agreed to remit all their dollar revenues to the Central Bank of Nigeria, CBN, to boost the nation’s External Reserves and foreign exchange flows into the country.
Global
US new home sales up by 8% in December - Bloomberg
US new-home sales unexpectedly jumped 8% in December, boosted by falling mortgage rates, exceeding forecasts and offering a bright spot in the housing market. Northeast led the surge, while prices dipped slightly. Overall sales up 4.4% year-on-year.
U.S. trade deficit in goods narrows to $88.5 billion in December - Tele Trader
US goods trade gap narrowed slightly to $88.5 billion in December, with higher exports offsetting rising imports. Exports climbed to $169.8 billion, imports to $258.3 billion. Inventories edged up from November but remained below year-ago levels.
Market Commentary:
Overview:
Market sentiment experienced an improvement, buoyed by the easing measures implemented by China's central bank and the release of robust US Purchasing Managers' Index (PMI) data. However, a late fade was observed in US equities, coinciding with a rise in bond yields. Today's significant events on the economic calendar include the European Central Bank (ECB) policy decision and the release of US Q4 Gross Domestic Product (GDP) data.
Currencies/Macro:
US dollar exhibited mixed performance, with notable gains for Japanese yen and Swiss franc, while CAD weakened after the Bank of Canada meeting.
EUR/USD reached a high of 1.0932 but retreated to 1.0885, a net gain of +0.3%.
GBP/USD found support from improved UK services PMI, trimming gains to 0.3% at 1.2720.
USD/JPY declined to a low of 146.66 during the Tokyo session but recovered to 147.55, net -0.5%.
China’s central bank, the PBoC, announced a 50bp reduction in the reserve requirement ratio (RRR) for banks, injecting CNY1tr in long-term liquidity.
Bank of Canada left its policy rate unchanged at 5.0%, removing language about further rate hikes.
Concerns about upside risks to inflation persisted, with a mention that the risk of another rate hike was “not zero”.
USD/CAD bounced from 1.3430 pre-meeting to 1.3520, making the loonie the weakest in the G10.
Flash January S&P Global Eurozone PMIs remained weak, with services falling to 48.4 and manufacturing rising to 46.6.
Flash January S&P Global US PMIs were stronger than expected, with manufacturing at 50.3, services at 52.9, and the composite at 52.3.
UK PMIs improved, with services at 53.8, manufacturing at 47.3, and the composite at 52.5.
Interest Rates:
US 2yr treasury yield bounced from 4.29% to 4.38%, and the 10yr yield rose from 4.09% to 4.18%.
Market pricing expects the Fed funds rate to be unchanged at the next meeting, with a 35% chance of a cut in March.
New Zealand rates markets expect the OCR to be unchanged on 28 February, with a 50% chance of a rate cut by May.
Mixed credit spreads with Main tighter at 59, CDX little changed at 55.5, and US IG cash improving.
Commodities:
Crude markets jumped on a larger-than-expected inventory draw and China's RRR rate cut.
Metals surged on the China 50bps RRR cut, with copper up 1.9%, nickel up 2.2%, zinc up 2.7%, and aluminium down 0.3%.
Iron ore markets also jumped on China stimulus news, with the February SGX contract up $4 to $135.95.
Day ahead:
Eurozone:
IFO survey of German business sentiment expected to be little changed in January.
US:
ECB expected to keep policy rates on hold. US GDP in Q3 expected to slow to a 2.0% annualized pace.
The Week Ahead:
Monday:
Tuesday:
Wednesday:
UK Flash Manufacturing PMI climbed to 47.3
UK Flash Services PMI climbed to 53.8
US Flash Manufacturing PMI came in at 50.3
US Flash Services PMI came in at 52.9
Thursday:
EA Main Refinancing Rate will stay at 4.50%
US Advance GDP q/q increased at an annual rate of 3.3 percent in the fourth quarter of 2023
US initial jobless claims up by 25,000 to 214,000
Friday:
Core PCE Price Index m/m (US)
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