#Africa #Markets | 23 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian stocks ease, dollar near 2-wk lows on Trump comments
  • Dollar eases after Trump complains about greenback strength
  • Trump ratchets up protectionist rhetoric, hits stocks
  • Investors await Trump-Juncker trade talks later this week

Oil Markets

  • Oil prices mixed as G20 warns of risks to growth
  • Brent crude futures up 2 cents at $73.09 a barrel (0037GMT)
  • US WTI crude futures down 8 cents at $68.18 a barrel

Precious metals

  • Gold rises further as US dollar eases
  • Spot gold up 0.2 pct at $1,234.24 an ounce (0045GMT)
  • US gold futures for August delivery up 0.3 pct at $1,234.20 an ounce

Grains

  • Wheat falls from near 6-wk high, dry weather limits losses
  • Most active CBOT wheat futures down 0.3 pct at $5.14-1/4 a bushel (0121GMT)
  • Most active corn futures up 0.1 pct at $3.69-1/4 per bushel
  • Most active soy futures up 0.1 pct at $8.65-3/4 a bushel
  • Most active rice futures unchanged at $11.93 per hundredweight

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

  • Nigeria inflation data for June due [fcst. 11.0% yy, prev. 11.6%]
  • Ghana interest rate decision expected [fcst. 16.0%, prev. 17.0%]
  • China’s Xi Jinping in Rwanda for 2-day visit; arrived on Sunday
  • India’s Modi due in Rwanda today

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

  • Egyptian women challenge social norms by practising Parkour
  • Ethiopia prime minister calls for multiparty democracy – chief of staff
  • Egypt’s Sisi says false rumours main threat to Arab countries
  • US doubts ability of South Sudan’s president and rebel leader to bring peace
  • Kenya’s Safaricom restores services after voice and data outage
  • Eleven taxi drivers shot dead in South Africa on return from funeral
  • In Senegal, China’s President Xi pledges stronger Africa ties
  • Migrant charity files manslaughter complaint against cargo ship, Libya
  • Egypt hikes gas prices by up to 75 pct in IMF-backed austerity plan
  • Egypt says Israel’s Jewish nation-state law undermines Middle East peace
  • Zimbabwe’s president courts white voters ahead of election
  • Liberia’s biggest palm oil project quits eco-certification scheme
  • Eritrea appoints first ambassador to Ethiopia in two decades
  • Soccer – Africa looks for answers after disastrous World Cup
  • Ivory Coast government faces collapse in coalition row
  • Ethiopia’s birr black-market evaporates as confidence booms
  • Ghana’s 91-day bill edges up to 13.32 pct
  • Investor group oppose General Electric plans for Kenyan power plant
  • Nigeria to devise green bond issuance programme by end 2018
  • Nigeria flying home 152 citizens stranded in Russia after World Cup
  • Africa Crude – Nigeria’s Bonny Light programmes emerge
  • Shareholders approve Steinhoff Africa Retail name change
  • Mugabe-era minister jailed for corruption in Zimbabwe
  • Zimbabwe presidential election too close to call – poll
  • As Ethiopia’s “Wall” comes down, exiles dream of going home
  • Court blow to tax plans aimed at funding cheap Kenyan housing
  • Ethiopia offers amnesty to recently freed political prisoners
  • South African retailer Truworths flags dip in annual profit
  • Nigeria central bank asks lenders to bid for Chinese yuan – traders
  • Kenyan shilling holds steady amid excess liquidity in the market
  • Ivory Coast issues 8-yr 100 bln CFA ($171 mln) bond
  • Libya rejects EU plans for migrant centres on its territory
  • Gabon oil workers’ union ends strike at Total facilities
  • Ugandan shilling unchanged amid low appetite for lenders
  • South Africa’s Sasol flags up to 11 pct drop in FY earnings

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

#Global #Markets | 23 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

(GMT+1)

CALENDAR
08:00 Turkey Consumer Confidence 
10:15 Nigeria Inflation Rate YoY 
11:00 Germany Bundesbank Monthly Report 
13:30 US Chicago Fed National Activity Index 
15:00 Euro Area Consumer Confidence Flash 
15:00 US Existing Home Sales MoM 
15:00 US Existing Home Sales 
18:00 UK BoE Broadbent Speech 
01:30 Japan Nikkei Manufacturing PMI Flash 
07:45 France Business Confidence 
08:00 France Markit Services PMI Flash 
08:00 France Markit Manufacturing PMI Flash 
08:30 Germany Markit Services PMI Flash 
08:30 Germany Markit Manufacturing PMI Flash
NEWS
Moody’s Upgrades Jamaica’s Outlook to Positive 
Moody’s Improves Israels’s Outlook to Positive 
Moody’s Changes Iceland’s Outlook to Positive 
S&P Revises Greece’s Outlook to Positive 
US Stocks Edge Down on Friday 
Brazil Job Creation Ends 5-Month Streak 
European Shares Fall on Trade Tensions, Earnings 
Dollar Weakens Further on Trump Comments 
Belgium Consumer Morale Improves in July 
Slovak Current Account Balance Swings to Surplus in May 
Canadian Dollar Jumps After Strong Data 
Canada Retail Sales Rise More than Expected in May 
Canada June Inflation Rate at Over 6-Year High 
North Korea Economy Contracts the Most in Over 20 Years 
Morocco Inflation Rate Eases to 2.5% YoY in June

Source: Trading Economics, Macroafricaintel Research

macroafricaintel Weekly | 23 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
23 Jul Nigeria CPI, % yy (mm) Jun 2018 11.0 (1.0) 11.6 (1.1)
23 Jul Ghana Policy Rate, % 16.0 17.0
24 Jul Nigeria Policy Rate, % 13.0 14.0
26 Jul South Africa PPI, % yy (mm) Jun 2018 5.4 (0.5) 4.6 (0.7)
30 Jul Kenya Policy Rate, % 9.0 9.5

macroafricaintel | [#StopTheKillings] Is Africa prepared for the next global financial crisis?

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Volatility is back in global financial markets. In early February, Denver-based American hedge fund, Ibex Investors, with just $350 million assets under management, made US$17.5 million on a US$200 thousand VIX wager, an 8,600% return. How come? It bought insurance to protect it when markets go haywire; a farfetched scenario at the time. But they eventually did; on 5 February. More than expected wage growth data in early February raised expectations that the American Federal Reserve would hike interest rates at a faster pace than earlier thought. Bond yields shot up consequently. Expectedly, equity markets took a hit; as the cheap debt hitherto fueling their rally was about to start getting dear. Higher inflation expectations were confirmed almost two weeks afterwards, when American inflation data for January came out at 2.1 percent, 20 basis points above the consensus estimate of 1.9 percent. A week later, hawkish Fed minutes confirmed the fears of market participants. Prior to the release of the minutes, the Fed led markets to believe there would probably be about three rate hikes in 2018. Afterwards, some economists began to suggest there could even be as much as five rate hikes. This is probably extreme. But such varying views, fears and sharp market reactions are evidence of what has been missing from the markets since global central banks starting flooding them with easy money in the aftermath of the 2007-08 global financial crisis: volatility.

Unprepared
In tandem with the Fed, the Bank of England is similarly on a tightening cycle. And the European Central Bank has already signalled monetary contraction could come as early as 2019, even as it has already started paring down its quantitative easing (QE) programme. The Bank of Japan has also started to reduce its asset purchases. Does that mean the end of easy money, though? Not really. At 1.5 percent, American money is still relatively cheap. And even in England, where consumer inflation (3 percent in January) is already above the much sought after 2 percent target of other global central banks, the BOE rate is just 0.5 percent. Emerging markets (EMs), which have been huge beneficiaries of QE, need to start preparing for a post-QE world, however. This is because as interest rates start to rise in advanced economies, as they already have, there is going to be an increasing opportunity cost to allocating capital to EMs. Even so, still attractive EM yields would continue to make the carry-trade too tempting to ignore. But the party will not last forever, surely. At some point, there would be a sharp market correction, as yields rise in response to tighter global monetary policy. When that time comes, emerging and frontier markets, particularly African ones, not already prepared might suffer damaging shocks.

Andrew Alli, president & chief executive of Lagos-based Africa Finance Corporation (AFC) highlights why African markets might be at risk: “Many African countries have run down their reserves and/or borrowed significantly since the financial crisis and, as such, don’t have as much “fiscal space” as they did prior to the last financial crisis. Also their macro positions – deficits/inflation etc – have worsened.” Wale Okunrinboye, fixed income and currency specialist at Ecobank, the pan-African bank, corroborates his view: “Reserve levels across most countries have declined markedly across board as fiscal and current account pressures increased reserve drawdowns across most oil exporters whose economies went into recession….[so] SSA economies at the present appear lightly equipped to deal with [another] global financial crisis.” This was not always the case. In the run-up to the [2008-9] global financial crisis, helped by [the] commodity price rally, [ample] FX reserve levels…alongside relatively low debt levels and high economic growth rates, helped [African] countries deploy countercyclical measures to temper spillover shocks, Ecobank’s Okunrinboye adds. Some African countries have been taking precautions, though. For instance, Kenya sought and secured a 2-year US$1.5 billion standby credit facility from the International Monetary Fund (IMF) in March 2016. It has not had cause to use it; that is, even as the prolonged presidential elections last year could have triggered a need to do so. For such arrangements to achieve their confidence-boosting utility, however, the respective authorities would have to be very transparent: there were revelations in February that the buffer had actually not been available to Kenyan authorities since June 2017. The IMF provided clarification to news agency Reuters in February on why it stopped the authorities’ access for that long: “the programme has not been discontinued but access was lost in mid-June because a review had not been completed”, said Jan Mikkelsen, the IMF representative for Kenya. Still, market participants might not consider such arrangements to be entirely iron-clad in the future.

Still limited exposure
As commodity prices have been rising, could squandered foreign exchange reserves accrete in time before any potential crisis? Mr Okunrinboye gives a comprehensive explanation: “Though [commodity] prices have rebounded, they remain at discounts to levels seen during the commodity super-cycle”. So, wide current account deficits still persist. “Furthermore, capital pressures lurk on the horizon, as a search for yield [which] drove heightened portfolio inflows to SSA capital markets, [caused] significant asset price inflation.” Thus, hurried hot money exits in the event of another global financial crisis are likely to fuel exchange rate pressures. “[And] following an expansion in debt levels [by African economies due to QE], fiscal leg-room appears narrow relative to the last GFC; even as elevated inflation has forced many of these economies into hawkish positions with little choice but to tighten [even more in the event of sudden] currency pressures.” [So, even as] a host of SSA economies are now entering into structural reform programs with the IMF, the overall sense is that they seem lightly prepared for another event of a similar scale.” Even so, it is not entirely improbable that they could come out again largely unscathed. According to AFC’s Alli, “Africa’s general lack of exposure to global trade flows (<3%)” is one reason why.

(An edited version was published by African Business magazine in March 2018)

#Africa #Markets | 20 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asia stocks unnerved by yuan slide, heightened trade war fears
  • MSCI Asia-Pacific index choppy, Hang Seng down over 0.5 pct
  • Spreadbetters expect European stocks to open lower
  • China state banks seen buying yuan after its fall to 1-yr low
  • Dollar sags after Trump shows displeasure towards Fed’s hikes

Oil Markets

  • Oil prices rise as concerns about oversupply ease
  • Brent up 0.3 pct at $72.80 (0034GMT)
  • US WTI crude futures up 0.7 pct at $69.97 per barrel

Precious metals

  • Gold prices slip for 6th session as dollar trades near 1-yr high
  • Spot gold down 0.3 pct at $1,218.72 an ounce (0352GMT), may test support at $1,204.45/oz
  • US gold futures down 0.5 pct at $1,218.30/oz

Grains

  • Corn set for biggest weekly gain in almost 3 months on strong demand
  • Most active CBOT corn contract up 3.1 pct for the week, the most since week ending 27 Apr
  • Most active soybeans gained 3.6 pct for the week, their biggest since 25 May
  • Most active wheat futures up 1.8 pct for the week, recouping some of last week’s deep losses

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

  • Mozambique president Filipe Nyusi in Rwanda for 3-day visit; arrived Kigali yesterday (19 July)
  • South Korean prime minister Lee Nak-Yeon in Kenya for 2-day visit; arrived Nairobi yesterday (19 July)
  • Key focus on China’s Xi trip across the African continent; in South Africa on 24 July for BRICS summit

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

  • Congo’s Kabila says election on track but stays mum on own future
  • US judge sets plea change for Algerian who recruited ‘Jihad Jane’
  • Investor group opposes General Electric plans for Kenyan power plant
  • US lets Somali immigrants stay 18 more months
  • North Korea, Eritrea have world’s highest rates of modern slavery – report
  • Mystery Egypt sarcophagus found not to house Alexander the Great’s remains
  • Africa Crude – Angolan crude sells quickly due to open arbitrage
  • South Africa’s rand retreats after lending rate unchanged, stocks steady
  • South Africa cenbank holds rates; sees inflation up, growth down
  • Guinea’s mining minister says there will be Simandou deal, talks go on
  • Egypt’s EFG-Hermes to buy Nigerian broker in frontier market push
  • Nigeria Wema Bank to sell 20 bln naira debt to boost capital ratio
  • Saudi oil exports to drop by about 100,000bpd in Aug – OPEC governor
  • Senegal convicts 13 for attempt to establish jihadist cell
  • Italian PM calls for EU body to coordinate migrant arrivals
  • Ethiopian Airlines says it is in talks for stake in Eritrean Airlines
  • As Sudan currency continues descent, inflation hits 64 pct in June
  • Cameroon arrests four soldiers suspected of executing women and children
  • South African reserve bank leaves repo rate unchanged at 6.5 pct
  • Ghana introduces higher income tax band to shore up revenue
  • Amid Kabila stand-off, Congo parliament extends privileges to former presidents
  • Kenyan shilling seen on back foot, others steady; in week ahead
  • Nigeria to need up to $300 mln for new national carrier – document
  • Freed Mauritanian anti-slavery activists vow to keep fighting
  • Uganda shilling a touch firmer as banks pare positions
  • Eritrean troops withdraw from Ethiopian border – Eritrean press agency
  • Zambia to share data on austerity measures with IMF – finmin
  • Ethiopian Airlines says in talks with to purchase stake in Eritrean Airlines
  • South African pharmacy Dis-Chem bolstered by solid sales growth in March-June
  • Steinhoff says around 90 pct of creditors support debt lock-up
  • Kenyan shilling weakens, undercut by oil importer demand
  • South Sudan’s Kiir says ready to accept peace deal
  • Kenyan court temporarily suspends “Robin Hood” tax on bank transfers
  • Namibia nets $218 million loan from African Development Bank
  • Ango American reports 6 pct rise in Q2 output
  • Alphabet to deploy balloon internet in Kenya with Telkom in 2019
  • Ethiopia appoints ambassador to Eritrea – Fana TV 

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

#Global #Markets | 20 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

(GMT+1)

CALENDAR
07:00 Germany PPI MoM 
09:00 Spain Balance of Trade 
13:30 Canada Core Inflation Rate YoY 
13:30 Canada Retail Sales MoM 
13:30 Canada Inflation Rate MoM 
13:30 Canada Inflation Rate YoY 
01:00 Argentina G20 Fin Ministers and CB Governors Meeting 
08:00 Turkey Consumer Confidence 
09:15 Nigeria Inflation Rate YoY 
13:30 US Chicago Fed National Activity Index 
15:00 Euro Area Consumer Confidence Flash 
15:00 US Existing Home Sales MoM 
15:00 US Existing Home Sales 
01:30 Japan Nikkei Manufacturing PMI Flash
NEWS
Thailand Import Growth Slows 
Thailand Exports Rise Less than Estimated 
Thailand June Trade Surplus Larger than Expected 
New Zealand Tourist Arrivals Decline in June 
Argentina Retail Sales Gain Steam 
US Stocks Close Lower on Trump’s Fed Comments 
European Stocks Close Lower on Trade Tensions 
Colombia Trade Deficit Widens in May 
Colombia Imports Rise 21.1% YoY in May 
Brazil Business Confidence Improves in July 
South Africa Leaves Monetary Policy Unchanged 
South African Rand Falls Ahead of Policy Decision 
Philadelphia Fed Manufacturing Index Above Forecasts 
Indian Rupee Hits All-Time Low

Source: Trading Economics, Macroafricaintel Research

#Africa #Markets | 19 Jul

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Global Markets

  • Asian shares rise on US earnings but trade worries rattle yuan
  • S&P 500 index at 5-mth peak on solid US earnings
  • Asian shares gain but lack market-lifting catalysts
  • China markets lag, yuan hits 1-yr low on tariff issues

Oil Markets

  • Oil prices extend gains, buoyed by unexpected drop in US gasoline stocks
  • Brent crude futures up 0.1 pct at $72.98 per barrel (0043GMT)
  • US WTI crude futures up 0.3 pct at $68.96 per barrel

Precious metals

  • Gold inches higher as US dollar eases
  • Spot gold up 0.1 pct at $1,227.55 an ounce (0058GMT)
  • US gold futures for August delivery little changed at $1,227.40 an ounce

Grains

  • Soybeans edge higher; wheat pauses after recent gains
  • Most active CBOT wheat futures unchanged at $4.94-1/2 per bushel (0101GMT)
  • Most active corn futures up 0.1 pct at $3.61-1/4 per bushel
  • Most active soy futures up 0.2 pct at $8.59 per bushel
  • Most active rice futures up 0.7 pct at $11.91 per hundredweight

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

  • Ghana mid-year budget review today
  • South Africa’s central bank to announce interest rate decision [fcst. 6.5%, prev. 6.5%]

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

  • North Korea, Eritrea have highest rates of modern slavery – report
  • Too good to be true? Slum graffiti warns Kenyans about trafficking risks
  • Airbus inks deal to sell passenger planes to Uganda
  • Egypt determined to find Italian student’s killers – Sisi
  • Guinea’s mining minister says there will be Simandou deal, talks go on
  • Ethiopia asks Saudi for year’s worth of fuel, with payment delayed
  • Africa Crude – Nigerian loading programmes trickle out
  • South African rand dips on dollar resurgence, stocks rise
  • Ghana’s economy seen up to 40 pct bigger after data overhaul – officials
  • Nigerian police say 8 Boko Haram suspects confess to Chibok abduction
  • Light rail line in Nigeria’s capital opens to passengers
  • South Africa gold producers offer single-digit pay hikes to unions
  • Nigeria’s Senate to investigate “anomalies” in renewal of oil leases
  • Nigeria plans re-launch of national airline in December
  • Steinhoff extends ‘early bird’ lock-up fee deadline for second time
  • Equatorial Guinea targets CHC Helicopter in compliance crackdown
  • Flags, flowers greet first Ethiopia-Eritrea flight in 20 years
  • Obama urges Africa to do more to stem brain drain
  • Migrant rescue boat aims for Spain with bodies, shunning Italy
  • Kenya to launch Nairobi financial centre later this year – finmin
  • South Africa’s retail sales up 1.9 pct y/y in May
  • Ugandan shilling weakens as demand from energy, manufacturing firms weigh
  • Egypt remittances expected to rise nearly 50 pct to $26 bln for FY 2017-18
  • South Africa’s CPI rises to 4.6 pct y/y in June
  • UN says global fight against AIDS is at “precarious point”
  • Kenya shilling strengthens on tourism and horticulture inflows
  • Ethiopia says reforms “to unleash private sector”

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