#Africa #Markets | 24 Oct

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia stocks struggle as global woes persist, oil near 2-mth lows
  • MSCI Asia-Pacific index down 0.2 pct, Nikkei lost 0.35 pct
  • Asia stocks down but drop curbed after Wall St shows resilience
  • Crude sags after Saudi Arabia says it can increase supply

Oil Markets

  • Oil extends declines as Saudi Arabia commits to meet demand
  • Darkening economic outlook also weighs on markets
  • US crude stocks rise by 9.9 mln barrels – API
  • Brent crude futures down 7 cents at $76.37 a barrel (0031GMT)
  • US WTI crude futures down 12 cents at $66.31 a barrel

Precious metals

  • Gold prices inch up amid international economic, political worries
  • Spot gold up 0.1 pct at $1,231.27 an ounce (0102GMT)
  • US gold futures down 0.2 pct at $1,234.20 an ounce

Grains

  • Corn prices edge down amid brisk pace of US harvest
  • Most active CBOT wheat futures up 0.1 pct at $5.09-1/2 per bushel
  • Most active corn futures down 0.3 pct at $3.69 per bushel
  • Most active soy futures down 0.2 pct at $8.56 per bushel
  • Most active rice futures unchanged at $11.03 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • South Africa inflation for Sep-18 data due [fcst. 4.8% yy, prev. 4.9%]
  • South Africa medium term budget policy statement today
  • Zambia independence day

Key African events or data releases yesterday & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Soccer – Al Ahly to meet Esperance in African Champions League final
  • Morocco eyes IMF deal on new credit line by end of year
  • Zimbabwe lifts import ban after cash crunch prompts panic buying
  • Kenya wins case against Cortec Mining on rare earths, niobium licence
  • Morocco may consider selling stakes in Maroc Telecom in 2019 – finmin
  • South African pension fund buys majority stake in Africa’s biggest cattle firm
  • South African markets falter as risk appetite wanes
  • Africa Crude – Angolan trade picks up; supply of Nigerian Bonny Light to rise
  • Train in deadly crash in Morocco was travelling at twice the spped limit – prosecutor
  • Kenya sets aside funds to develop domestic mobile phone industry
  • Ethiopian migrants die off Tanzania coast trying to sail to South Africa – police
  • UK’s Tullow to ramp up oil output in Ghana by end of year
  • Senior manager at Acacia Mining charged by anti-corruption body in Tanzania
  • Shoprite to pay South African customers for reusing plastic bags
  • Kenya’s ARM Cement creditors approve sale of assets to cut debt
  • Delayed state offering stalls Egypt’s surging share sales
  • Kenyan shilling expected to ease due to end-month importer demand
  • Uganda shilling steady, draws support from charity flows
  • Ghana central bank governor: Oil price rise, currency drop raise inflation threat – BBG TV
  • MTN says still in talks with Nigeria over $8.1 bln transfer row

N.B. Full stories of above headlines are available on Reuters

#Global #Markets | 24 Oct

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

(GMT+1)

CALENDAR
07:45 France Business Confidence 
08:15 France Markit Services PMI Flash 
08:15 France Markit Manufacturing PMI Flash 
08:30 Germany Markit Services PMI Flash 
08:30 Germany Markit Manufacturing PMI Flash 
08:30 Sweden Riksbank Rate Decision 
08:30 Sweden Monetary Policy Report 
09:00 South Africa Inflation Rate YoY 
09:00 Euro Area Markit Services PMI Flash 
09:00 Euro Area Markit Manufacturing PMI Flash 
09:30 UK UK Finance Mortgage Approvals 
14:00 Mexico Unemployment Rate 
14:45 US Markit Composite PMI Flash 
14:45 US Markit Services PMI Flash
NEWS
Paraguay Holds Interest Rate at 5.25% 
US Stocks Close Lower on Tuesday 
Argentina Trade Balance Swings to Surplus after 20 Months 
European Shares Plunge on Tuesday 
Italian Borrowing Cost Rises after EC Rejects Budget 
Ukraine Industrial Output Unexpectedly Falls for 2nd Month 
Richmond Fed Manufacturing Index Falls from Record High 
Euro Area Consumer Confidence Rises Slightly in October 
Mexico Economy Loses Steam in August 
Saudi Arabia Inflation Rate Edges Down to 2.1% 
UK CBI Business Optimism Index Lowest Since 2016 
UK CBI Industrial Trends Orders Fall More than Expected 
Slovenia Consumer Confidence Edges Up in October 
Hong Kong Inflation Rate Picks Up to 2.7% in September

Source: Trading Economics, Macroafricaintel Research

macroafricaintel | Unorthodox economics gets the nod

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Emerging markets central bankers are in somewhat of a flux at this time. Orthodox monetary policy measures to moderate capital outflows from their economies as global fund managers increasingly find the risk-reward characteristics of advanced economies attractive, as central banks there give up unconventional measures, are proving insufficient. Measures that seem to be able to live up to the task are not rules-based; capital controls, for instance. Their discretionary nature is precisely why they have been discouraged by the mainstream Washington Consensus. But even that consensus may be about to change. In October, the International Monetary Fund appointed Gita Gopinath as chief economist; a signal it is open to new thinking. Why so? Ms. Gopinath is a maverick of sorts. Her views on exchange rates are somewhat unorthodox. A prolific researcher, she has produced numerous papers to make her point. It seems the establishment finally decided such “unorthodox” views are now needed at the high table. One could argue the IMF is simply riding the wave, though. To resist what an increasing number of central bankers are beginning to institutionalize would be to lose relevance. At the IMF meetings in Bali in October, central bankers from Thailand, Malaysia, Singapore and Indonesia were unabashedly in support of newer and creative monetary policy measures to complement the predominant conventional inflation-targeting framework endorsed by the IMF.

Capital flows management (CFM), which are simply fine words for capital controls (albeit it includes other measures), is especially controversial. Crude at its worst, being no more than blocking the outflow of funds from an economy mostly, it is a mechanical way to manage the disruptions from sudden outflows, as was the case during the so-called American Fed taper tantrum in 2013, and now as the same central bank is decidedly and rightly on an interest rate hiking path. Still, the costs of capital controls are not likely to change. Investors do not soon forget when their funds are blocked from exiting a jurisdiction at precisely the time they so desperately needed them to. In some cases, if not most, when the flows are later eased, investors take significant losses from a likely depreciated local currency. Curiously, the same investors do not mind taking the same country risk much later on, when yields are temptingly attractive enough to make it worth their while.

But why should flexible exchange rates not suffice to absorb the shocks of sudden capital outflows? The inflationary effects can sometimes be too much to bear by the local populace of most developing economies, whose purchases tend to be mostly imported goods, leading to unrest. And the resultant damage can be difficult to repair in time enough to avoid a bigger crisis; political instability, for instance. In other words, even as foreign investors may be well pleased about ease of flows and liberality of the exchange rate, when the country becomes unstable because of too high prices from first and second round effects of exchange rate depreciation, they are not likely to want to invest anyway. Consequently, what would be apt would be for central bankers to strike a balance. Put another way, as Bank of Indonesia governor Perry Warjiyo put it on a panel (“Is there a new orthodoxy for monetary policy?”) at the IMF meetings in mid-October, a central bank should intervene in times of shock, not to target a certain level of exchange rate, but “to smooth out the adjustment process.” Similar to managing the capital flow cycle with CFM measures, macroprudential policy tools – which though take myriad forms but are simply measures aimed at maintaining financial stability – are proving to be quite effective in managing distruptions to the lending cycle as well. There has to be a new consensus. Inflation-targeting, while still relevant but increasingly less so (as the current dominant 2 percent target proves too low to avoid the zero lower bound of real interest rates), must be complemented by capital flows management and macroprudential measures as needed; and indeed any other future creative solutions aimed at financial stability. Together, they should become the new orthodoxy.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. https://www.businessdayonline.com/columnist/rafiq-raji/article/unorthodox-economics-gets-nod/

#Africa #Markets | 23 Oct

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares buckle to European woes, Saudi anxieties
  • Asian shares down 1.3 pct, US stock futures shed 0.8 pct
  • World leaders not convinced by Saudi Arabia’s Khashoggi account
  • European stocks hit by worries over Italy’s budget

Oil Markets

  • Oil prices fall as Saudi Arabia pledges to play ‘responsible role’ in market
  • Markets expected to tighten once Iran sanctions kick in
  • US sanctions against Iran to start Nov. 4
  • Rising US oil output to offset Iran
  • Brent crude oil futures down 0.4 pct at $79.52 a barrel (0318GMT)
  • US WTI crude futures down 0.3 pct at $69.16 a barrel

Precious metals

  • Gold nudges up as Asian shares edge lower
  • Spot gold up 0.1 pct at $1,222.53 an ounce (0056GMT)
  • US gold futures up 0.1 pct to $1.225.30 an ounce

Grains

  • US soybeans hit 2-wk low as harvest peace exceed forecasts
  • Most active CBOT wheat futures unchanged at $5.08 per bushel (0120GMT)
  • Most active corn futures down 0.1 pct at $3.69-1/4 per bushel
  • Most active soy futures down 0.4 pct at $8.55 per bushel
  • Most active rice futures up 1.6 pct at $11.22 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Day 2 of UNCTAD World Investment Forum #WIF2018 in Geneva (22-26 Oct); Botswana, Namibia presidents attending

Key African events or data releases over the weekend & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Morocco looks to privatisation to curb budget deficit in 2019 – minister
  • Biya wins Cameroon election to extend 36-yr rule
  • Africa Crude – Spot trade hampered by slow emergence of export programmes
  • South Africa’s rand, stocks swept up in EM rally
  • South Africa’s latest finance minister walks budget tightrope to fix ailing economy
  • Morocco to deport 141 migrants arrested at Spanish enclave fence
  • Kenyan ARM Cement’s administrator seeks asset sale to cut debt, keep it afloat
  • Zambia revives plan to cull 2,000 hippos over next five years
  • Uganda shilling unchanged as commerical bank, importer demand slumps
  • Kenyan shilling weakens against the dollar
  • Kenya warns against unlicensed online forex trading
  • South African state firm Transnet removes CEO
  • South Africa’s Verimark says majority shareholder intends to delist firm

N.B. Full stories of above headlines are available on Reuters

#Global #Markets | 23 Oct

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

(GMT+1)

CALENDAR
07:00 Germany PPI MoM 
08:00 Turkey Consumer Confidence 
08:20 Indonesia Interest Rate Decision 
09:00 Spain Balance of Trade 
11:00 UK CBI Industrial Trends Orders 
11:00 UK CBI Business Optimism Index 
11:30 UK BoE Haldane Speech 
14:30 US Fed Kashkari Speech 
15:00 Euro Area Consumer Confidence Flash 
16:20 UK BoE Gov Carney Speech 
18:30 US Fed Bostic Speech 
21:30 US API Crude Oil Stock Change 
23:15 US Fed Evans Speech 
01:30 Japan Nikkei Manufacturing PMI Flash
NEWS
Philippines Government Budget Gap Widens 161% YoY 
US Tech Stocks Decouple from Losses 
Colombia Economic Growth Climbs to 4-Month High 
Mozambique Holds Key Interest Rate at 15% 
Botswana Keeps Interest Rate Steady at 5% 
Luxembourg Jobless Rate Falls to Over 9-Year Low 
Bangladesh Inflation Rate at 1-1/2-Year Low of 5.43% 
Irish Wholesale Prices Fall the Most in 4 Months 
Morocco Inflation Rate at 11-Month Low in September 
Greek Current Account Surplus Narrows in August 
Taiwan Export Orders Rise 4.2% YoY in September 
European Shares Rise on Monday 
Chinese Shares Surge 
Spain New Industrial Orders Rise the Most in 8 Months

Source: Trading Economics, Macroafricaintel Research

macroafricaintel Weekly | 22 Oct

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
22 Oct Botswana Policy Rate, % 5.0 5.0
24 Oct Namibia Policy Rate, % 6.75 6.75
24 Oct South Africa CPI, % yy (mm) Sep 2018 4.8 (0.4) 4.9 (-0.1)
24 Oct South Africa Budget Balance, % GDP 2018 -4.5 -3.3
25 Oct South Africa PPI, % yy (mm) Sep 2018 6.1 (0.5) 6.3 (0.6)

#Africa #Markets | 22 Oct

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia shares pare losses as China rallies on stimulus hope
  • Nikkei falls 1 pct, leads more losses in Asia
  • Market anxious ahead of rush of US earnings
  • Saudi Arabia, Italy, Brexit keeps geopolitics in focus

Oil Markets

  • Oil edges up on looming Iran sanctions, but US-China trade war caps gains
  • Sanctions against Iran oil exports to start Nov. 4
  • US rig count highest since 2015
  • ICE to launch new US crude export futures contract
  • Other producers will struggle to replace Iran shortfall – IEA
  • Brent crude oil futures up 10 cents at $79.88 a barrel (0248GMT)
  • US WTI crude futures up 19 cents at $69.31

Precious metals

  • Gold inches higher as Asian stocks slip
  • Spot gold up 0.1 pct at $1,227.56 an ounce (0039GMT)
  • US gold futures up 0.2 pct at $1,230.60 an ounce

Grains

  • Soybeans fall to near 2-wk low as US exports slow
  • Most active CBOT wheat futures down 0.6 pct at $5.11-1/2 per bushel (0119GMT)
  • Most active corn futures down 0.3 pct at $3.66 per bushel
  • Most active soy futures down 0.1 pct at $8.56 per bushel
  • Most active rice futures unchanged at $11.23 per hundredweight

Key African events or data releases today
[Posts & comments at my Twitter handle @DrRafiqRaji]

  • Botswana, Namibia presidents in Geneva for UNCTAD World Investment Forum #WIF2018

Key African events or data releases over the weekend & early a.m today
[Posted & commented on some headlines below at my Twitter handle @DrRafiqRaji]

  • Author of critical book on Egypt’s economy arrested: sources, wife
  • Ethiopia signs peace deal with rebels from gas-rich region
  • Nigeria deploys special security force after 55 killed in Kaduna state
  • Nigerian unions threaten to resume strike unless govt acts on minimum wage
  • At least 14 killed in violence in eastern Congo’s ebola zone
  • Comoros places governor of strife-torn Anjouan under house arrest
  • Tunisia’s UGTT union cancels national strike after govt deal
  • Exiled Ethiopian Olympic runner who protested against govt returns home
  • Egypt extends state of emergency for 3 months
  • Hundreds of migrants storm Spanish enclave in North Africa, one dies
  • Egypt’s EGX30 index falls after govt signals delay to IPO programme
  • Return to Egypt revives memories of desert battle for British veterans
  • Tanzania arrests 104 people for plotting “radical camps” in Mozambique
  • Congo’s controversial voting machines start arriving
  • African billionaire returns home unharmed after release by kidnappers – police
  • Tunisia to sell eurobonds worth $1 bln early next week – govt source
  • Egypt commends ‘decisive’ and ‘brave’ actions by Saudi king over Khashoggi case
  • Liberia launches investigation into US charity after rape allegations
  • Ghana’s 91-day bill rises 13.75 pct
  • Court ot hear MTN’s case against Nigeria’s central bank in $8.1 bln transfer row
  • Libya’s Hariga oil port operating normally following protest – workers
  • US official optimistic Congo ebola outbreak can be controlled
  • Africa Crude – Angola’s December cargoes start trading
  • Russia to send more military trainers, equipment to Central African Republic
  • Comoros authorities sign pact to end standoff on island
  • Detained former head of Ethiopian region tried to escape – police
  • Guards on Hong Kong-flagged ship repel pirates off Somalia coast – EU force
  • African bank Oragroup to launch largest ever IPO on Abidjan bourse
  • Acacia Mining looks to force talks on Tanzania dispute
  • Cameroon court rejects all petitions calling for re-run of elections
  • Tanzania police work with Interpol to search for abducted tycoon
  • South African dairy firm Clover says in takeover talks, shares soar
  • Ugandan shilling unchanged; dollar demand slow
  • Kenyan shilling steady, remittances match importer dollar demand
  • Egypt postpones Eastern Tobacco share offering
  • Kenyan ex-sports minister charged over Rio Olympics graft
  • Kenya’s lone ice-hockey team has Olympic-sized dreams
  • Kenya to set up gold refinery to help small miners
  • Cameroon court rejects all petitions calling for re-run of elections
  • Acacia threatens to invoke investment treaty in Tanzania dispute
  • MTN Ghana revenue rises, driven by mobile money service
  • Bank of Kigali prices its cash call at 270 francs per share

N.B. Full stories of above headlines are available on Reuters