Trading Tuesday
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Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
MPC Meeting highlights:
At the end of the March 25th & 26th MPC meeting, the committee voted to:
Raise the MPR by 200bps to 24.75%.
Change the asymmetric corridor from +100/-700 to +100/-300 around the MPR.
Retain the CRR of Commercial banks at 45.00%
Adjust the CRR of Merchant banks from 10% to 14%.
Hold the liquidity ratio constant at 30.00%.
Tinubu okays infrastructure devt fund, FG eyes $25bn annually
Binance chief: FG contacts INTERPOL, soldiers held over detainee’s escape
Edo to float new gas company, sets target to convert 60% of vehicles to run on CNG
Global
Market Commentary:
Currencies/Macro:
The USD displayed mixed performance against G10 currencies. The Japanese yen showed minimal change for the day at 151.40 against the USD, barely affected by Japan's hints of potential intervention, as the yen remains at its weakest against the dollar since 1990. EUR/USD saw a modest increase of 30 pips to 1.0840, while GBP/USD appreciated by 0.3% to 1.2635.
In the US, new home sales for February unexpectedly dropped by 0.3% month-over-month, contrary to the anticipated 2.3% increase, with the previous month's data showing a 1.7% rise. The median sales price also decreased by 3.5% to a 32-month low of $400,500. The Chicago Fed's national activity index improved to 0.05, exceeding expectations of -0.34 and improving from the previous -0.54. The March Dallas Fed manufacturing survey index deteriorated to -14.3, worse than the forecasted -10.0 and the prior -11.3, with most components declining except for prices paid and received.
Comments from Federal Reserve officials highlighted varying expectations for rate cuts. Atlanta Fed President Raphael Bostic reiterated his view that only one rate cut might be needed this year, emphasizing the importance of patience. Fed Governor Michelle W. Cook advocated for a cautious approach to easing monetary policy, allowing more time for inflation to decelerate in certain segments of the economy. Chicago Fed President Austan Goolsbee, on the other hand, mentioned he is among those anticipating three rate cuts this year, indicating a period of balancing the dual mandate of employment and price stability.
Interest Rates:
The US 2-year Treasury yield climbed from 4.58% to 4.63%, while the 10-year Treasury yield increased from 4.19% to 4.25%. Market expectations indicate the Federal Reserve's funds rate, currently at 5.375% (midpoint), will remain unchanged at the upcoming meeting on May 2, but there's a 70% chance of a rate cut by June.
In terms of credit spreads, the session ended mixed, with the Main index improving slightly by half a basis point to 55. The CDX index was virtually unchanged at 52.5, and US investment-grade cash markets also remained stable. The week has begun with moderate primary market activity as Europe saw six issuers come to market, raising EUR 3.2 billion across a mix of corporations and banks.
Commodities:
Crude markets rebounded from recent declines, buoyed by indications that OPEC+ will maintain its current production goals at the upcoming Joint Ministerial Meeting. This positive momentum is further supported by reports that up to half of Russia's Kuibyshev oil refinery has been shuttered following a drone strike over the weekend. The May WTI contract saw an increase of 1.56%, reaching $81.89, while the May Brent contract rose by 1.44% to $86.66. According to Bloomberg, delegates anticipate no adjustments to production quotas at next week's OPEC meeting, as the current cuts seem to be effective in preventing any surplus. The focus of the meeting is expected to be on the compliance of individual members with the agreed production limits. Reuters reported that drone attacks have led to the shutdown of at least 7 Russian refineries, reducing production by 370,500 barrels per day or 7% of Russia's total output. Furthermore, despite previous assurances to the contrary, Houthi rebels launched five missiles at a Chinese-owned oil tanker on Saturday.
In addition to the developments in the crude market, European LNG prices surged following a Russian attack on an underground gas storage facility in western Ukraine. Although the facility was not damaged, Ukraine had been offering up to 10 billion cubic meters of natural gas storage capacity to foreign companies, accounting for about one-third of the nation's capacity.
Investment Tip of The Day
Prioritize the alignment of your investment choices with your life stages and financial goals. As your life circumstances and goals evolve, so should your investment strategy. For instance, younger investors might focus on growth-oriented investments due to a longer time horizon, while those closer to retirement may prioritize income and capital preservation. This alignment ensures that your investment approach remains relevant and supportive of your changing needs and objectives over time.