Trading Tuesday
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Market Data
Local
Global
*Data as of 6pm WAT
Market News
Local
Non-existing entities, other infractions make up $2.4bn FX backlog (Cardoso) - Punch
The governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, has said that about $2.4bn of the $7bn foreign exchange backlog he met when he got into office were from non-existing entities, requests without import documents among other infractions.
Power generation crashes to 59MW after fresh grid collapse - Punch
Power generation on the national grid crashed to 59.9 megawatts around 12 pm on Sunday as the country’s grid witnessed a nationwide collapse.
Mining: Nigeria To Attract $20bn Investment From UK, Saudi Arabia, Turkey, China - Leadership
Investors in the solid minerals sector have indicated interest in coming to Nigeria to invest $20billion in the sector in order to boost the nation’s economy.
IFC invests $2bn in Nigeria, says official - Punch
The Regional Vice President for Africa for the International Finance Corporation, Sergio Pimenta, has said that the investments of the institution in Nigeria were valued at $2bn and spread across different sectors.
Global
Mortgage rates jump back over 7% - CNBC
US mortgage rates jump to 7%, highest since December, fueled by strong economic data and Fed policy uncertainty. While this dampens buyer enthusiasm, it's unlikely rates will drop much further due to high inflation and still-rising home prices. Future rate trajectory depends on upcoming economic data, with inflation playing a key role.
Tech Layoffs Continue to Roil Industry With 32,000 Jobs Cut - Bloomberg
Tech industry faces another wave of job cuts in 2024, surpassing 32,000 so far. Smaller & targeted compared to 2023, driven by economic factors and tech downturn. Companies shift resources to AI, leading to increased job postings in that field despite overall layoffs. Market expected to rebound in next few quarters.
Senate releases $118 billion bipartisan aid proposal for Israel, Ukraine, border security - CNBC
Senate proposes $118bn bipartisan aid package: $60bn for Ukraine, $14bn for Israel, $20bn for border security. Deal faces hurdles in House as Republicans prioritize Israel funding and avoid giving Biden a win. Both sides accuse each other of politicizing the issue.
Market Commentary:
Overview:
The US dollar and bond yields extended Friday’s rise, supported by a firm US services survey. Today’s calendar is dominated by the RBA policy decision, quarterly statement, and Governor Bullock's media conference.
Currencies/Macro:
The USD posted significant gains, particularly against a soft British pound.
GBP/USD fell 1 cent or -0.8% to 1.2530.
EUR/USD lost half a cent or -0.5% to 1.0740.
USD/JPY found support from rising US yields, up 0.3% to 148.70.
The employment index jumped to 50.5 (est. 49.4, prior 43.8).
New orders lifted to 55.0 (est. 54.8, prior 52.8).
Prices paid squeezed uncomfortably to 64.0 (est. 56.7, prior 56.7).
US final S&P January services PMI at 52.5, slightly softer than the flash estimate of 52.9.
Eurozone final S&P January Services PMI is unchanged from the flash of 47.9.
Italian services PMI lifted to 51.2 (est. 50.8, prior 49.8), offset by a minor miss in the Spanish update (52.1, est. 52.3, prior 51.5).
UK final S&P January services PMI lifted to 54.3 (flash 53.8).
Chicago Fed president Goolsbee and Minneapolis Fed president Kashkari emphasized caution and the need for more data before easing.
Bank of England chief economist Pill seeks further progress in inflation declines.
Interest Rates:
US 10-year Treasury yields rose 14 basis points to 4.16%.
2yr yields increased about 11bp to 4.47%.
10yr Gilt yields closed +9bps at 4.00%, 2yr +9bps at 4.48%.
10yr Bund yields +7.5bps at 2.31%, and 2yr closing +5bps at 2.60%.
Markets price about a 15% chance of the Fed cutting rates in March, the first move only fully priced by June.
Main widened to 59.5, CDX out half a bp at 55, while US IG cash was little changed.
Commodities:
Crude markets gained despite hawkish comments from Powell and a surge in the US. March WTI at $72.85, April Brent at $78.09.
Fed Chair Powell pushed back on rate cut expectations in a Sunday interview.
European gasoil futures jumped on news of refining capacity offline in Russia due to a drone attack.
Steady Fed policy pushed prices lower across the board.
Copper was down 1.3% at $8,374, aluminum was down 1.3% at $2,204, and nickel fell by a larger 1.7% to $15,960.
Markets remained soft as traders looked towards the LNY shutdown. March SGX contract down $2.10, 62% Mysteel index up 20c at $127.80.
Day Ahead:
US:
The FOMC’s Mester, Kashkari, and Collins are all due to speak.
Eurozone:
Eurozone: Growth in retail sales is struggling to make headway as economic pressures linger (market f/c: –1.0%).
The Week Ahead:
Monday:
Tuesday:
ISM Services PMI (US)
Wednesday:
Thursday:
Unemployment Claims (US)
Friday:
Investment Tip of The Day
Stay Cautious of Illiquid Investments: Illiquid investments, such as certain private equity or real estate holdings, can be challenging to sell quickly. Evaluate liquidity risks in your portfolio.
Service Spotlight of the week - Technology Solutions
Meme of the Day
