FOMC, FOMC,FOMC

The much talked about December Fed meeting is finally here, 8:00pm Wednesday will see the Fed announce a new funds rate after a 2 day FOMC meeting. Investors have over the months anticipated a hike in funds rate given the Feds decision to gradually raise rates. Inflation however seems to pose the biggest challenge to a rate hike as inflation numbers remain soft despite solid economic growth in the US. CPI numbers are expected in by 2:30pm analyst forecast show expectations of a rise to 0.4% from 0.1% in November. Lower than anticipated CPI numbers could hold back the much expected rate hike. The dollar in Tuesday's trading rallied on the back of impressive PPI data. Core PPI rose to a 6 year high of 0.3%. USD/CAD rose to 1.2891 before retreating to 1.2867.


Inflation in Britain can't be held down as CPI numbers rose by 0.1 percentage points to 3.1%. Core CPI was however unchanged at 2.7%. Mike Prestwood, National Statistics Head of inflation noted that CPI rose to a 6 year high, a spin off from higher prices of computer games and lower airfares. Falling cost of computer equipments however offsets higher inflation. Brexit negotiations are expected to move on to trade talks at the EU's summit next week after all the back and forth on the size of the divorce bill and North Ireland. Employment data will take center stage for the British pound in Wednesday's trading as the market expects the release of earnings index, claimant count change & unemployment rate. GBP/USD was stable for most part of Tuesday's trading.

EUR/USD took a plunge on the back of impressive Producer's Price Index in the US. It fell to 1.1717 before moving back to 1.1723. Disappointing ZEW data was shrugged off by investors as they believe the German economy is looking sharp and is leading the way for solid economic growth in the Euro-area. The lack of government in German puts a bit of worry in investors mind. Today will see the release of German CPI, Employment change and industrial production of the Euro-area.

NZD/USD maintained it's upward movement while AUD/USD fell to thepressures of positiv PPI in the US. Trading in the course of the Asia session was relatively stable as the market looks forward to minutes of the FOMC meeting.

On the commodities side, Gold fell to 1,236 in the course of Tuesday's trading but rose back up to 1,244. The yellow metal is taking a beating from positive US data and divestment to Bitcoin. Oil prices rose on the back of unexpected pipeline shut down in the UK. Brent crude rose to $ 65.

Dangote Cement stirs industrial revolution in Africa, with the commissioning of Mfila plant in the Republic of Congo

Dangote Cement Plc yesterday added fillip to the on-going efforts at economic emancipation of Africa when it formally opened its 1.5mtpa capacity cement plant in Mfila, Congo Brazzaville, amid ecstasy by the government and the indigenes of the Country.

The new plant estimated at $300 million has potentials for about 1000 direct employment and thousands of several other indirect jobs.

Undoubtedly the biggest plant in Congo, its President, Mr. Denis Sassou Nguesso while inaugurating the plant said the investment was an industrial revolution, sort of, within the Economic Community of the Central African States (CEMAC), saying his country was happy to host the investment.

According to him, his government has observed the operations of Dangote cement in other African countries and it has helped buoy their economies by sparking off other allied industries expressing the hope that Congo situation would not be an exception.

The Congolese President described the coming on stream of the Dangote cement as timely and encouraging because it is starting operations at a time the total government revenues have plummeted by 31.3 percent and revenues from the oil sector have fallen 65.1 percent since 2015 due to a slide in global crude prices.

President Mohammadu Buhari who was represented at the event by a powerful delegation led by the Minister of Mines and Steel Development, Dr. Kayode Fayemi commended Alhaji Aliko Dangote and his Cement Company for championing economic renaissance of Africa with the construction of cement plants across several African countries saying the sterling accomplishment makes the Dangote Cement brand, and indeed Aliko Dangote himself, worthy ambassadors of Nigeria.

President Buhari said his government has consistently supported and encouraged the Dangote Group (http://Dangote.com) in its quest to contribute its quota to the economic emancipation of the African continent, which is blessed with a plethora of natural resources. “I believe that it is only home-grown practical solutions that can address the myriad issues plaguing Africa today and one of such challenges that Africa has been grappling with for decades is the infrastructure deficit. I am confident that massive investments in cement production, which is a key driver of infrastructural development, will contribute in no small measure, to addressing this perennial problem.”

President Buhari recalled with satisfaction that local cement manufacturers such as Dangote Cement, Lafarge and BUA, have exploited one of the solid minerals, limestone which is a basic input for cement production and which Nigeria has in abundance, in different parts of the country to achieve self-sufficiency in local cement production in 2015, and is now a net exporter of the product.

“The backward integration policy of the Federal Government in the cement sector, which was launched in 2002, has contributed to this success story by successfully substituting imports with local production, we have saved over $2billion spent on cement importation into Nigeria, annually.  

“We have also started using cement for road construction in the country due to its numerous advantages over the more common bituminous road. Again, in this area, Dangote Cement is leading the charge, through AG-Dangote, its joint venture with Andrade-Gutierrez, a construction giant in Brazil”, Nigeria’s President stated.  

Chairman of Dangote Cement Plc, Aliko Dangote in his address said his company was delighted to have completed the plant on schedule saying the addition of Dangote Cement’s 1.5 million metric tonnes per annum plant has more than doubled the total cement production capacity of Congo-Brazzaville, which now stands at 2.550 million metric tonnes per annum, far in excess of national demand.

“It is envisaged that this will contribute substantially to the availability and affordability of cement in the country and the Republic of the Congo will no longer need to depend on imports to bridge the gap between demand and supply. 

“It is our hope that the inauguration of the plant will boost Congo’s economy, conserve foreign exchange that would otherwise have been spent on imports for the country, and create employment opportunities down the value chain.”, he stated.

Dangote commended the Congolese government noting that the bold economic reform measures put in place by President Denis Sassou Nguesso administration have been quite salutary. “The construction industry, which is a major sector of the economy, is a beneficiary of his policies, and has been receiving the attention of investors. We believe that our investment will contribute to Congo-Brazzaville’s current economic renaissance under the leadership of the President Nguesso.” 

The Company Chairman pointed out that his organization received tremendous support and encouragement both from the government and the people of Congo-Brazzaville, right from the conceptualisation stage of our project, to its final completion, and commissioning.

In appreciation of the good gesture of the government and the people, Dangote disclosed that without waiting to stabilise production, the Cement company had already commenced CSR projects with the construction of a road with a length of 30km around Yamba, which would have cost the local government approximately 240 million CFA to execute.

He stated further “we have also disbursed scholarships for students and we are also building a school and renovating a hospital within our host communities. Apart from these, we have repaired a dilapidated bridge on a major highway at a cost of $300,000, to enable heavy duty vehicles to cross the bridge. As a policy, we also ensure that we give priority to qualified indigenes from our local host communities in our recruitment drive.”

Dangote told the gathering that Dangote Cement total production capacity across Africa at the end of May 2017, stood at 45.8 million metric tonnes per annum, making it one of the biggest cement producers on the continent adding that the aspiration is to rank among the top 10 cement producers in the world by 2020. 

Dangote cement commissioned its cement plants in four African countries namely: Ethiopia, Zambia, Cameroun and Tanzania. The Congo-Brazzaville plant, which began operations in the third quarter of 2017, will be the fifth cement plant that would be inaugurated in the last two years.

Yen Rises Despite Disappointing GDP

The Euro was high on positive economic data in Tuesday's trading recording a three weak high. The currency's recovery comes on the back of a 0.8% rise in q/q GDP in the Euro-area and a 30.9 ZEW economic sentiment signalling investors confidence in the growth of the Euro economy for the next 6 months. Italian GDP was also above expectations and strong growth in central and eastern European countries added to the overall positive tone. EUR/USD  returned to 1.1804 in the course of trading on Tuesday. French m/m CPI and the Euro-area's trade balance are expected in today. Investors bullishness on the Euro will however be dependent on major economic data coming out from other climes.


GBP had a rough encounter in Tuesday's trading as inflation numbers stood at 3.0%, falling short of analyst forecast by 0.1%. input PPI rose to 1% while Retail Price Index (RPI) and Core CPI came out disappointing. GBP/USD fell to 1.3074 before retreating back to 1.3186. Traders were cautious, watching closely the debate of the EU Withdrawal Bill. The legislation is crucial to ensure a smooth transition after Brexit but with only a small working majority, the prime minister, Theresa May, could struggle to pass the bill as up to 10 Conservative MPs are reportedly planning to vote against it. News coming in early Wednesday morning notes the British government defeated the first amendments to the bill. The bill however has a long way to go with the parliamentary scrutiny expected to take weeks. Earnings index, claimant count & unemployment data are expected in today. This together with the ongoing bill debate will set the tone for the British pound in Wednesday's trading.


The US dollar remains under pressure as declining treasury yields continues to weigh down the greenback. The dollar struggled against the Japanese yen dropping to a low of 113.29. During the Asian session it drop further to 113.05 despite Japan's poor GDP numbers. The currency however takes the center stage today with the release of CPI & retail sales data. Analyst forecast show a decline in CPI to 0.1% while retail sales is expected to fall to 0.0%.


On the commodities side, gold rebounded to 1,283 on the back of the declining dollar, while Brent crude fell by 1.17% to $61.48.

Inflation Takes Center Stage

Three weeks of a bullish run ended for the dollar in the prior week as tax reforms delay took its toll on the greenback. Investors became concerned about the delay in implimentation of the US corporate tax cuts after the Senate plan submitted on Thursday differed in key areas from the House version, revealing that corporate tax cuts might not take effect until 2019. USD/CAD fell to 1.2685 from 1.2757 the prior week. Economic data will be at the front burner this week as CPI and retail sales numbers are expected in on Wednesday. Analyst forecast show a 0.2% rise in core inflation while core retail sales is expected to slow down to 0.2% from 1% the prior month. The dollar traded flat against other major currencies at market open.


Some form of progress seems to have been made on the Brexit front. EU Brexit negotiator Michel Barnier in his meeting with the Brexit secretary David Davis in Brussels on Friday said that Brexit talks have achieved "some progress" but still more work needed to be done for the talks to move to trade relations. Moreover, he asked Britain to clarify its financial obligations to the EU within two weeks before he considers whether "sufficient progress" has been made ahead of the EU summit in December. Earlier, the UK Prime Minister, Theresa May, unveiled her plans to set an official date and time on the UK's departure from the EU. News filtering in in the course of the weekend however reveals Prime Minister's Theresa May is under pressure to resign her office.  40 conservative members of the parliament agreed to sign a no confidence in her. The Conservatives are 8 members short of what is needed for a leadership challenge. This may further the stall the already slow progress of the process of Brexit. On the economic front, CPI numbers and jobs data are to be released in the course of the new week. Rightmove HPI dropped to -0.8% during the Asian trading session, this pushed GBP/USD down to 1.3106, while GBP/JPY slipped to 148.96. No other economic data is expected for the rest of the day from the UK.

The Euro-area will also witness the release of major economic data this week as CPI, GDP  industrial production numbers are all expected this week. The prior week saw the ECB revise it's growth projection of the European economy to 2.2%, while inflation forecast was revised downwards to 1.5%. Forecast show analyst expect no change in Flash GDP q/q, while final core CPI y/y is also expected to remain at 1.4%.  Other data to look for include ZEW economic sentiment, current account & trade balance. The direction of these data will dictate the tune of the Euro for the week. Trade on the Euro however opened on a bearish note as it dropped to 1.1644 against the USD during the Asian trading session.

Canadian inflation will be top on investors list on Friday. The BoC governor, Stephen Poloz, noted in the prior week that the Bank's next move will be data dependent. Though employment numbers and consumer spending have been burgeoning, inflation isn't picking up as quickly as had been anticipated and economic growth in the second half of the year is showing signs of a slowdown compared to the first half. This accounts for the BoC's cautious stance on further rate hikes over the coming months. October CPI readings on Friday will therefore be watched carefully for any signs of an increase in inflation. A number higher than analyst forecast of 0.1% could give the loonie a jolly ride against the dollar.

Wage data from Australia will be in this week. Household debt has been outpacing wage growth, this has forced the Reserve Bank of Australia to leave rates as they are for quite some time. Forecast show analyst expect a 0.2 percentage points rise to 0.7%, actual data along this line will give the AUD a boost.


Wednesday morning will see the release of Japan's prelim GDP y/y. The economy is expected to maintain its growth streak as the last 6 quarters has seen the Japanese economy record positive GDP. Another quarter of expansion may however not translate to a rise of the JPY in the currency market as the BoJ's remains dovish.

A mysterious trade that moved 4 million ounces of gold in about 30 minutes on Friday drowned gold price, as it fell to 1,274.20. The yellow metal which had been trading below the psychological 1,300 point for quite some time has witnessed similar trade in recent months. Brent crude maintains its above $60 price.

Tax Reforms Twist & Turns, Brexit Talks Resumes

Tax reforms in the US remains big on investors minds as a delay which they are are uncomfortable with lingers. USD/JPY lost 0.2% dropping to 113.22.  US senators are paring some of the corporate tax cuts in an effort to keep the impact of the proposed bill under $1.5 trillion. Republican senators are pushing back the timelines on reducing the corporate tax rate until 2019 and will water down the original plan introduced by the Trump Administration. Treasury Secretary Steven Mnuchin has already said that a delay is better than a longer phase in. The amount of differences between the Senate proposal and the one working its way through the House of representatives are considerable and increase the chances of the tax overhaul not being a reality in 2017.  Unemployment claims was disappointing rising to 239,000 falling short of analyst forecast by 7,000. This is opined to come on the back of improvement of claims processing disrupted by the hurricanes. Despite the increase, claims remain far below the 300,000 mark. This feat, which holds true for the 139th consecutive week (the longest since 1970),  signals a robust jobs market. Wholesale inventory data was just in-line with investors expectations at 0.3%. Though the US is on a bank holiday, prelim consumers sentiments and inflation expectations are data to look for on the release front.

GBP/USD shrugged off Brexit noise as it rose 0.11% to 1.3131 given unimpressive economic data from the US. The Brexit talks resumed and Britain's financial obligation to the EU remains a challenge. The European Union is demanding EUR 60 billion, while Britain has countered with an offer for EUR 20 billion. The trade deal is most important to Britian, but the Europeans are insisting on more progress on the fulfillment of financial obligations as well as on other non-trade issues. If the sides still remain deadlocked in December without no deal in sight, hardliners on both sides could derail the talks completely, which would send shivers up the spines of investors and hurt the British pound. The Prime Minister's ability to follow through with Brexit remains a major issue as two ministers recently to resign from May's cabinet forcefully, and she hasn't been able to present a coherent Brexit policy to the Europeans or to the voters at home. BoE chair Mark Carney expressed concern at the lack of uncertainty over a final deal with the European Union, saying that the economy "should really be booming, but it's just growing." Economic data expected from the UK are manufacturing production, trade balance, construction output & industrial production all of which will dictate the direction of the pound today. GBP/USD & GBP/JPY traded flat during the Asian trading session.

The Euro was upbeat in Thursday's trading rising to 1.1653 against the dollar. The ECB's growth forecast for 2017 put the Euro-area's growth at 2.2%, 5 percentage points higher that the prior 1.7%. Its forecast of the UK's growth however fell to 1.5%. while it projects a slowdown for the nation in 2018-19 as well. Germany's trade balance rose above analyst forecast to 21.8b. Investors will be looking out for French industrial output and Prelim private payroll. Italy's industrial production is also expected to come in today. The currency remained flat against the dollar during the Asia session.

The RBNZ delivering what was perceived as a "hawkish hold" of rates at record low levels returned momentum to the NZD as it gained 0.2% rising to a 2 week high against the dollar to 0.6979 earlier in the day before it retreated. Despite the pullback, the pair retained most of its gains. Neighbors Australia had its Reserve Bank lower inflation forecast all through 2019. Although this was the likely outcome due to the change in CPI measurement methodology, AUD/NZD could experience a sell-off  given the divergent monetary policy rhetoric of late between the RBNZ and RBA.

Commodities data showed Gold returned to a bullish run as the dollar wars with tax reforms. The yellow metal rose to 1,288. Brent crude retained it's above $60 price.

RBNZ in Focus, Tax Reforms Rides the Dollar

Jolts jobs opening returned the dollar to a rally as it beat analyst expectations staying at 6.09m. This aided the USD's return upwards gaining 0.28% against the Canadian dollar rising to 1.2807. Fitch raised US debt to GDP ratio on the back of the effect current tax reforms would have on federal deficit. The house remains divided on the tax reforms as Democrats and some Republicans are uncomfortable with the effect the tax cut would have on debt. News filtering in during the Asian session notes that US Senate Republicans may delay the corporate tax cuts by 1 year. But details could change ahead of Thursday's formal release of the bill by the Senate Finance Committee.  Crude inventories are expected in today analyst have forecasted  -2.5m as against the prior week's -2.4m.


The RBNZ will later today announce its stance on interest rate as it concludes its 2 day monetary policy meeting. Expectations are that the official cash rate will be left unchanged at 1.75%. The Labour party's intention of including full employment to the RBNZ's responsibility may come to fruition as reports indicates the party is reviewing the dual function of the Central Bank. This could also include the addition of external members to the monetary policy committee which presently consist of the RBNZ chair and his deputy. Trading during the Asian session brought back NZD/USD to 0.6917 after it slid to 0.6890 in the course of trading yesterday. A dovish rate statement may push the currency pair further down south.

The Euro took a plunge in the course of trading on Tuesday as it fell to a low of 1.1557 against the dollar. Investors ignored a higher than forecasted retail sales data as German Industrial Production, French Balance Budget and Retail PMI were not as impressive. Retail sales rose to 0.7% from -0.1% the prior period and above analyst forecast of 0.6%. 3 of ECB policymakers according to sources familiar with the ECB, wanted a tighten of the central bank's quantitative easing program even if inflation remains soft. Note that, the ECB announced on October 26 to continue buying bonds until price pressures increase. The ECB chief, Mario Draghi, did not comment on monetary policy at the second ECB Forum on Banking Supervision on Tuesday, while the ECB board member Sabine Lautenschlaeger said she "would have liked a clear exit" from the asset purchase program. Besides the French trade balance, the Euro-area would have a quite day in terms of economic data.

The British Pounds returned northward on the back of Halifax HPI being much in line with analyst expectations. The index rose to 0.3% down from the prior period's 0.8% but above a 0.2% forecast. GBP/USD rose to 1.3176 but retreated during the New York session on the back of brexit pressures as investors wait for negotiation to enter the next stage. It rose back to 1.3168. News on Brexit and economic data from other major currencies will dictate the tune of the pound for the day as there is no economic data expected from the UK today. GBP/JPY traded flat during the Asian session.

The RBA's retention of cash rate at 1.5% led the Aussie down a bearish path to 0.7630 against the dollar. Inflation being below the Central Bank's band of 2-3% and rising household debt continues to hold down interest rate. China's trade balance if positive could return AUD/USD upwards.


On the commodities side, gold erased Monday's gains falling to 1, 272 as the dollar rebounded. Oil prices remained above $60 on the back of the mid east tumult. OPEC in its 2017 world oil outlook forecasted a rise in shale production and demand growth for the next 2 years

RBA, RBNZ takes the Floor

The RBA & the RBNZ will be taking their turn this week to announce their stance on interest rate. The RBA is expected to leave rates unchanged as Australia struggles with rising household debt and inflation remains way below the Bank's 2-3% target. The AUD has been on a downward spiral against the dollar since the release of soft retail sales number in October. Over in New Zealand, the RBNZ will also be meeting to decide on interest rate this week. The Labour party's election win dragged down the Kiwi dollar against other major currencies as the party's inexperience made investor's uncomfortable. A better than expected jobs data however reminded investors of the country's strong fundamentals despite lower growth outlook. The acting governor of the RBNZ will be expected to announce no change in cash rate but investors already anticipate a rate change at the next meeting. The Asian trading session saw the release of q/q inflation expectation which fell to 2% from 2.1% in August. This pulled down NZD/USD by 21 pips dropping to 0.6885 as at the time of writing. m/m ANZ commodities prices also fell to -0.3% from 0.8%.


USD gracefully went through the event full week coming out almost unscared as it recovered from the beating it took at the release of poor non-farm payroll numbers. EUR/USD rose to 1.1689 reacting to a decline in NFP,  before retreating back to 1.1607. President Trump confirmed Jerome Powell as the next Fed Chair, he is expected to carry on with the present monetary policy stance of gradual  rate increase, while the house released the tax bill. The new week will be a bit quite for the dollar in terms of economic data. The greenback's resilence despite the stormy week signals it may soon resume a rally.

 The Euro which had a quite week continued to suffer from post-ECB meeting reactions dropping to a low of 1.1606 against the dollar and EUR/CAD fell to 1.4808. The Euro's week will be dominated by final services PMI and other industrial & trade data from across Europe. A stronger Euro has triggered worries of lower export in some ECB policymakers hence, trade data will be watched closely. 8am today will see the release of some of these data which would shape the tune of the Euro for the new week.

BoE's highly anticipated meeting threw the pound down south as GBP/USD fell to 1.3058 despite a rate hike. This is a positive for UK exporters as weaker pound makes UK goods cheaper for trade partners. Industrial and trade numbers are also expected in the UK this week. The manufacturing sector remains a strong driver of UK's GDP post brexit as it bouyed  the country's faster than expected q3 GDP.

USD/JPY fell to 114.00, but has rebounded during the Asian session climbing up to 114.73. The Bank of Japan kept monetary policy unchanged at its meeting the prior week, but with a dovish BoJ, the discussion appears to be shifting to whether further measures are needed to accelerate the journey towards reaching the 2% inflation target. The summary of opinions of the October meeting, due on Thursday, should provide some insight as to how far the discussions went on the dissenting board member's view to start targeting the yield on 15-year Japanese government bonds in addition to 10-year ones.

On the commodities side, Gold plunged to 1,266 in Friday's trading while Brent crude rose by 0.29% to $62.25 as support grows for OPECs oil cut extension and Saudi clamps down on its corrupt leaders.

Dollar Subdued, BoE Rate Hike Dovish

An inverse relationship seems to exist between the BoE's rate hike and the GBP as the currency lost 1.3% against the dollar after the Central Bank announced the new rate of 0.5%. The decline of the pound comes on the back of  the dovish statement from the BoE. Though the rate was raised for the first time in 10years from 0.25% to 0.5%, Gov Carney notes that further hikes will be gradual given Brexit's effect on the economy. The pound fell to 1.308 against the dollar after the announcement. The BoE also cut down its projections for economic growth to 1.7% from 1.8%. On the release front, the UK's construction PMI improved to 50.8 from 48.1 the prior period, signalling expansion in the sector. Services PMI will come in today, forecast show 53.3, a higher than forecasted Services PMI could give the pound a lift.


The FOMC minutes were as investors expected,with the Fed reiterating the December hike and temporary soft inflation numbers. The dollar retreated gains as investors await the announcement of a new  Fed chair. Lower jobless claims of 229,000 wasn't enough to draw positive sentiment to the dollar. The market was waiting for President Trump to announce Jerome Powell as the new Fed chair all through Thursday. Jerome Powell is said to be favoured by President Trump as he will maintain the status quo of slow rate growth, which is in-line with Trump's aim of keeping interest rate lower and the dollar soft.  Other data released include preliminary non-farm productivity at 3% higher than the prior period's 1.5% and preliminary unit labour cost at 0.5% same as analyst forecast. USD/CAD fell to 1.2805 . Investors will be looking to non-farm payroll, ISM non-manufacturing PMI, wage growth & trade balance for the direction of the dollar today.

Though EUR/USD rose to 1.1686 during the New York trading session, it stayed within the range established since the ECB policy announcement last week. The pair was last at 1.1668, with the US dollar getting most of the attention this week due to the various key risk events out of the US, in contrast to the relatively more quiet news flow about the EURO. No major economic data is expected from the Euro-area today.

The Canadian dollar posted gains against the USD as USD/CAD retraced to 1.280. Canadian employment data and trade balance will be in today, if these data fall short of analyst expectations and the US releases impressive data, the pair would move back to 1.29 levels.

The Asian session saw the AUD/USD slide down to 0.7685 given lower than expected retail sales data. Positive services PMI from China wasn't enough to return the bulls to the currency pair. The AUD has been weak against other major currencies since the release of soft inflation numbers last week.

On the commodities side, Gold posted little gains rising to 1,283 during the New York trading session, the yellow metal remains below the 1,300 psychological level. Oil prices remained in the greens with Brent crude gaining 0.35% to $60.83. OPEC's November 30th meeting will determine if the bulls will remain with oil prices.

GBP Stays Strong Ahead of BoE Meeting

A 2 day FOMC meeting kicked off yesterday with the release of a rate expected later today by 19:00. Investors anticipate no rate change till December. A hawkish statement by the FOMC will likely not have significant impact on the dollar, as the expectation of a rate hike has been fully priced in by investors. Inflation however has been soft for most part of the year. The core PCE price index (a measure of inflation focused on by the Federal Reserve), started the year at 1.9% but dropped to 1.3% in September. This may make some Fed committee members uncomfortable about raising rates until inflation tilts closer to the Fed's 2% target. The Fed Chair Janet Yellen noted recently that the weakness in inflation is temporary, this is expected to be reiterated in today's announcement. Any change from the Fed on inflation outlook in the statement to a more cautious one would be perceived as dovish which would send the dollar southwards. This coupled with the effect the ongoing Russian investigation could have on the presidency would lead to volatility in the dollar. Investors also await the announcement of a new Fed Chair before the end of the week, nominees have been narrowed down to Jerome Powell & John Taylor. News coming from the white house says Jerome Powell is favored to take the position, this may not seat well with investors as John Taylor is preferred for his hawkish stance.

Data from the US showed higher than expected Chicago PMI & CB Consumer Confidence. Continuous positive data from the US have pushed the dollar up against other major currencies. The dollar traded at 1.290 against the loonie during the New York trading session. ADP non-farm employment change, ISM manufacturing PMI & crude inventories are economic data coming out of the US today.

The Bank of England takes center stage on Thursday as investors expect the first rate hike in 10 years. This is already being priced in, as the pound rose to 1.3289 against the dollar despite a -10 GfK Consumer Confidence index. Monetary Committee members however remain divided on a rate hike, while some policymakers point to a higher than target inflation as a reason for a rate hike, the other points to low consumer spending as signalled by soft retail sales as basis to retain interest rate at current level. Manufacturing PMI will be released today, analyst have forecasted 55.8 a 0.1 drop from the prior month's 55.9.

The Euro-area released inflation and GDP data, and the results were mixed. CPI Flash Estimate edged down to 1.4%, shy of the forecast of 1.5%. Core CPI Flash Estimate dipped to 0.9%, short of the estimate of 1.1%. There was better news from Preliminary Flash GDP, which beat analyst expectations by 0.1 percentage points at 0.6%. Unemployment continues to head lower, dropping to 8.9%, lowest level since March 2009. The ECB last week announced it will begin tapering its asset purchase program, as the Euro-area economy has rebounded in 2017. Inflation however remains below the ECB's target of 2%. The asset purchase program has been extended to April 2018, but the ECB could implement an extension if economic data tails off or if inflation fails to move upwards. No economic data is expected from the Eurozone today, while France & Italy are on bank holidays

The Spanish government seems to have Catalonia under its control after effecting article 155 of its Constitution earlier on in the week. The central government is pressing charges of rebellion on the ousted Catalan president CarlesPuigdemont, a charge which carries a 30year jail term. CarlesPuigdemont has however been reported to be hiding in Brussels. It remains unclear what Puidgemont will do next - he could request political asylum or even declare a government-in-exile. Elections have been slated for December 21, and two parties from Puidgemont's coalition have declared they will participate in the election. Investors are keeping a close eye on happenings in Spain.

Canada continued with the release of unimpressive economic data. The country's GDP for the month of October slid to -0.1%, USD/CAD jumped to 1.2907 after the data was released The contraction was partially attributed to maintenance shutdowns in the chemical and extractive industries and is consistent with last week's decision by the Bank of Canada to cut its projections for Q3 annualized growth to 1.8% from 2.0%. The BoC will be comfortable with a slowdown as it would help curb increased borrowing cost. Investors will be looking out for the Canadian manufacturing index and Governor Poloz statement later in the day.

A strong dollar continues to put gold under as the yellow metal is still trading below the 1,300 psychological level. Gold is negatively correlated with the dollar. Oil prices remain high gaining 0.33% to close at $61.14. Oil prices have been burgeoning since Saudi Arabia & Russia showed support for continuation of production cut.

BoE, BoJ Takes Center Stage as New Fed Chair Emerges this Week

The bulls were all blazing for the dollar all through the prior week. The approval of 2018 budget at the senate signaled renewed drive towards the achievement of President Trump's tax reforms before the end of the year. This together with speculations surrounding who to assume the position of the next Fed head had the dollar on an upward reel. Announcement of the new Fed chair along with the US major jobs data (non-farm payroll) comes in on Nov 3rd, while a FOMC meeting will hold on Nov 2nd. The FOMC meeting won't be eventful as rates are not expected to go up till December. Jerome Powell seems to be favoured as the next Fed Chair, this may not seat well with investors as their eyes are set on John Taylor who is more on the hawkish side.

Analysts have forecasted a rise in non-farm payroll to 311,000 following the drop to 33,000 the prior month. All of these will weigh heavily on the performance of the dollar in the coming week.

European Central Bank's decision to cut down its Asset Purchase Program (APP) by half and at the same time suggesting it will come to the market's aid if there be signs of a reversal effect on the Euro-area's economy sent the Euro on a downward spiral as investors perceived it as dovish. The Euro sank to record low of 1.1609 against the dollar. The new week is laced with final manufacturing PMI from all across Europe. 8am today will see the release of Germany's retail sales & m/m CPI numbers, Spain will also release its y/y CPI & q/q GDP by 9am, this should set the tone for the EURO as the week commences.

Spain in the course of the weekend implemented article 155 on Catalonia, taking over all forms of authority and setting Dec 21 as the date for elections in the region. This comes after the region's autonomous authority declared Independence. The Spanish government is now in charge of the region's police force and civil service. Spanish prosecutors meanwhile plan to start pressing rebellion charges against Carles Puigdemont and his ousted government, these charges carry a 30 year jail term. The problem remains internal but heightened tensions will not go well for the Euro.

GBP has a busy week ahead with different economic data due for release. All eyes will be on the Bank of England's meeting scheduled to hold on Thursday. This would definitely take the Shine off the FOMC meeting as policymakers are divided on whether or not there should be a rate hike. A rise in UK's inflation to 3%, 1% above the apex bank's inflation target advances the case for a rate hike but low consumer spending as shown in recent economic data signals a rate hike might be a little premature.

News coming in the course of the weekend notes the EU is shifting focus away from Brexit to concentrate on more pertinent issues coming up in 2019, such as the European Parliament's elections. This is considered a positive for Brexit as it will make it politically easier for the assembly to approve any deal on the terms of Brexit.

Aussie, Kiwi & Loonie all bowed to the power of the dollar in the past week. Unimpressive jobs data from Australia, investor’s low confidence in New Zealand's new government and dovish stance of the Bank of Canada had all three currencies in investor’s black book. Australia's trade balance, retail sales & China's manufacturing data if positive could change investor's sentiment towards the AUD. Employment data from Canada and New Zealand are economic data on investors mind for both currencies this week. Indications of an improving labour market in New Zealand may give support to the NZD in the course of the week.

The Bank of Japan (BoJ) will also take center stage this week. Expectations are that it will continue with its economic expansionary stance as inflation is still below 1% giving life to threats of deflation. Retail sales released during the Asian trading session improved to 2.2% but dropped 0.1 percentage points below analyst forecast. The Yen will remain weaker against other currencies given policy divergence even as the Japanese economy gains momentum.

The Asian trading session was uneventful given low volumes in the market.

Gold prices remained below 1,300 as dollars gained momentum in the prior week, while Brent crude reached a high of $60 as OPEC plans to extend oil production cut beyond March 2018 with backing from Saudi-Arabia and Russia.

Oando Contests Suspension in Court, Faults SEC’s Decision

The management of Oando PLC on Tuesday said it had obtained an order of court restraining the Nigerian Stock Exchange, NSE, from placing its shares on technical suspension.

A statement signed by the oil firm’s spokesperson, Alero Balogun, and the Chief Compliance Officer, Ayotola Jagun, on Tuesday faulted the decision of the Securities and Exchange Commission, SEC, and the NSE.

The NSE had last week suspended trading on the shares of the oil firm.

The bourse said it was acting on the directive of the SEC.

On Monday, the bourse relaxed its sanction and placed the company’s shares on technical suspension, saying trading on its shares will not affect prices.

But Oando in its statement Tuesday evening said that on Monday it obtained an ex-parte order from the Federal High Court granting an interim injunction “…restraining the NSE and any other party working on their behalf from giving effect to the directive of the SEC to implement a technical suspension of the shares of the company pending the hearing and determination of the motion for injunction.”

The company also said it obtained a court order restraining the SEC from conducting an audit into its finances pending the hearing of the motion.

The statement said that the notice had been served to the regulatory bodies on Tuesday, adding that the bodies are expected to comply henceforth.

Similarly, the firm said it took its decision because the SEC acted without having concrete evidences, noting that it concluded without thorough investigations.

The statement also condemned the regulatory body’s decision to audit expenses in the company’s books saying it was not in the best interest of shareholders.

The Dollar Dominates the Market

The strength of the dollar was retained in Thursday's trading, news of Janet Yellen being out of the raise for Fed Chair sat well with investors. Candidates for the position of the Fed Chair have now been narrowed down to Jerome Powell and John Taylor. Advance GDP q/q will be released later today, analyst forecast show 2.6% rise. US economic data is quite strong with preliminary GDP at 3% and employment nearing full capacity. All this fuels the likelihood of an interest rate hike despite soft inflation numbers. The US is the first to end Quantitative Easing (QE) with the cleaning up of its balance sheet starting in October 2017. The Asian session saw a continuation of the currency's dominance of all other currency pairs. All eyes will be on advance GDP later today.

ECB's highly anticipated meeting threw the Euro into a downward spiral. The currency has lost 1.55% against the US dollar as at the time of writing. The ECB as expected cut down on its asset purchase by half (from 60bn Euro to 30bn Euro) but extended its stimulus program by 9 months. ECB governor Mario Draghi noted that interest rate will be unchanged till the end of the stimulus program, the ECB also noted that "if the outlook becomes less favorable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the Asset Purchase Program in terms of size and/or duration." Though the stimulus extension was anticipated, investors were uncomfortable with the accompanying statement hence, the fall of the Euro. Though there seems to be no major economic data coming out of the Euro-area today, the coming week will see the release of CPI numbers across Europe.

The British Pounds had a disappointing show on Thursday as poor CBI Realized Sales together with strong economic data coming out of the US changed investors sentiment towards the pound. GBP/USD fell to 1.3123 as at the time of writing. The CBI Realized Sales (a leading indicator of consumers spending) fell to -36 points (the sharpest drop since March 2009) from 42 points in September. High inflation seems to be taking its toll on consumer spending a key driver of economic growth. In its November 2nd meeting, the Bank of England must decide whether or not to increase interest rate for the first time in 10years. Policymakers are divided on this decision, proponents are pointing to the 3% inflation which is higher than the Bank's 2% target inflation, while opponents argue that the economy is showing signs of weakness and a rate hike could curtail economic growth. No major economic data is expected from the UK today.

  

Dovish stance of the Bank of Canada (BoC) coupled with a strong dollar left the loonie in doldrums as USD/CAD traded at 1.2864 during the Asian trading session. The Australian dollar didn't fair any better against the dollar it slipped to 0.7635 early Friday. Q/Q Producers Price Index released earlyFriday morning fell to 0.2% from 0.5% the prior period, way below analyst 0.4% forecast. Trading activities on both currencies will be determined by US advance GDP, positive q/q GDP from the US will push both currencies further down.

Gold continues to trade below the 1,300 psychological levels given the yellow metal's negative correlation with the dollar. Brent crude however rose to $59.43 as Saudi and Russia gives their backing to an extension of production cut beyond March 2018. The extension should be confirmed at OPEC's meeting next month. A confirmation will see oil prices rally.

AUSSIE TAKES A BOW

Unimpressive CPI numbers from Australia saw the Aussie take a bow against the US dollar during the Asian session. The numbers which were short of analyst expectations saw AUD/USD fall to 0.7736 losing 0.54%. The Reserve Bank of Australia (RBA) has remained dovish on the back of high household debt and low wage growth. Soft CPI numbers fuels the RBA's dovish stance. Hence, investor’s sentiment towards AUD/USD tilts towards the bearish side.

The US dollar remains firm as President Trump's tax plan looks on the way to meet a December deadline, Trump met with the Republican senators to discuss the proposed tax cut on Tuesday. The dollar traded flat against most of its other pairs during the Asian session, USD/JPY however dipped during the session. We suspect a bit of retracement might be taking place as the pair has been on a bullish ride for a while. Investors patiently await the president's choice of the Fed Chair given the effect this would have of monetary policy and the strength of the dollar. Most economists are of the view that monetary policy will be largely driven by the performance of the US economy. However, despite low inflation, odds of an interest rate hike in December stands at 96% according to CME FedWatch. Core durable goods and durable goods order are data to look out for from the US today.

The Japanese Yen fell against the dollar at the release of the country's manufacturing PMI. The index dropped to 52.5 from the prior month's 52.9 falling short of analyst forecast of 53.1. Though manufacturing seems to have slowed in October, it is the 14th straight month of expansionary reading. Prime Minister Shinzo Abe's election win will see the country continue with its economic stimulus until inflation gets to the Bank of Japan's (BoJ) 2% target. Bloomberg quoting unnamed sources noted that the BoJ intends to downgrade its inflation forecast in its quarterly report expected next week. From latest forecast, BoJ estimate core CPI to rise 1.1% for the fiscal year ending in March 2018. Y/Y CPI numbers are expected later this week.

Investors continue to stand on the sidelines watching the Euro in expectation of the ECB meeting in Thursday. Positive flash PMI numbers fuels the ECB's tapering plans as the Central Bank has maintained loose monetary policy to spur the economy of the Euro-area. Markit noted that "firms don't appear to have been unduly affected by recent euro strength, with growth of new export orders accelerating in October." And, "healthy demand in export markets appears to be outweighing any negative currency impacts." Investors expect the ECB to announce its reduction of asset purchase at its meeting on Thursday given the return to growth of EU economies. The Euro was mostly flat against the dollar during the Asian session.

The British Pounds experienced a bit of a sell down dropping to 1.3118 against the dollar in Tuesday's trading. GBP/USD was flat all through the Asian session. BoE Deputy Governor Jon Cunliffe warned that the economy has "clearly slowed" this year. That's due to "the squeeze we have seen on real incomes and imported inflation from the depreciation [sterling] that has come in. And pay has remained relatively subdued." He pointed out that interest rates "will not need to go up by as far and as fast as they did before the crisis". Still, "over the forecast period of three years rates will need to rise".

He however, emphasized that the exact timing of rate hike is "a more open question". Prelim q/q GDP numbers are expected later this morning, analyst have forecasted a 0.3% growth same as the prior period.

The Bank of Canada's monetary policy meeting comes up today. The Bank which has raised rates twice this year will most likely retain its current rates on the back of soft economic data. USD/CAD traded in favor of the USD during Tuesday's trade but stayed flat during the Asian session. A dovish monetary policy minutes will see the loonie fall against the dollar.

Kiwi Dollar remains in doldrums as investors are uncomfortable with the policies of the new coalition government. NZD/USD continues to trade low, now down to 0.6892. New Zealand's trade balance is expected later today. Positive economic news from the US will keep NZD/USD on a downward spiral as investor’s sentiment remains negative on NZD.

Gold prices have steadied this week, after the metal slipped 1.9 percent last week. Investor risk appetite increased feeding off positive employment, manufacturing and housing data from the US beating estimates. The Asian session saw a drop in the yellow metal to $1,274. Brent crude stood at $58.38 up 0.09% as at the time of writing.

Abe Takes the Shine

Japanese Yen takes the spot light as snap elections are on going. Exit polls show a supermajority win for incumbent Prime Minister Shinzo Abe. Abe’s Liberal Democratic Party and coalition partner Komeito are set to win between 281 and 336 seats of the 465 total, boosting Abe's chances of becoming Japan's longest serving political leader. Investors see an Abe win as a downer for the JPY, it would mean a continuation of on going fiscal stimulus to lift the Japanese economy from deflation. USD/JPY closed the prior week on a high note reaching $113.49 at the end of trading on Friday. Investors are set to continue the bullish run on USD/JPY, if PM Shinzo Abe returns to power.

The US dollar ended the prior week on a positive note with the Senate's approval of 2018 budget, clearing a significant hurdle and moving the GOP closer to tax reform.  This together with a higher than forecasted existing home sales data released on Friday, retained investor's positive sentiment on the USD. Keen on investors mind is who takes the position of the next Fed Chair. News from the US says Jerome Powell, John Taylor and Janet Yellen are President Trump's top three nominees. The president will announce his choice on the 3rd of November 2017, the present Fed Chair's tenure will end February 2018. This week will see the release of advance q/q GDP, analyst forecast a q/q GDP of 1.8%.

Spain continues to battle the Catalonia region. Prime Minister Rajoy on Saturday noted that Spain will dismiss Catalan President Carles Puigdemont and his government and take control of the regional police force and public television and radio channels as part of a barrage of measures that could be ratified by the Senate within a week. The crisis seems of no effect on the Euro but heightened tensions could change investor's sentiment.

ECB's much anticipated October 26th meeting comes up this week. Plans on it bond-buying for 2018 will be laid out. Expectations are that the Central Bank will maintain the large size of its balance sheet through reinvestments of it maturing bond. The Euro had the bears in domination for most part of the prior week. The weekly chart shows the currency closed at 1.778 against the dollar. Flash PMI across the manufacturing and services sectors are expected the coming week.

The British pound continues its battle against Brexit. Though the pound closed higher against the dollar in Friday's trading, 'Brexit Deadlock' negotiations trailed it for most part of the prior week. PM Theresa May appearing before EU leaders on Friday made some headway with EU leaders assuring her of resuming trade talks as soon as they are clear on UK's fulfilment of its financial obligations to the EU. UK's Prelim q/q GDP is expected in the course of the new week as investors keep a close eye on how the British parliament handles its exit of the European Union.

The Canadian dollar took a beating on Friday on the back of soft CPI and retail sales numbers. The Bank of Canada which has hiked rates twice this year is expected to meet on the 25th of October. Investors anticipate no rate hike given soft economic data. Hence, the bullish run on USD/CAD is expected to continue in the new week.

The Australian dollar had a positive week with higher than expected employment data and positive economic data from China. The Aussie is however positioned to loose the most from a stronger dollar and a hawkish Fed. Higher US bond yields and a nod to Fed Chair Nominee John Taylor will knock off the AUD against the dollar. Australia's q/q CPI is expected in the course of the week.

The kiwi dollar suffered from a Labour party win in the course of the week. New Zealand First announcement of its coalition with Labour party ticked off investors and triggered a sell down on NZD. Investors are uncomfortable with the Labour party in power as it is opined to be inexperienced. The National party succeeded in returning the economy to a budget surplus and maintaining economic growth for 8 consecutive years. The Labour party will be introducing new immigration laws and making significant changes to the RBNZ. The sell down on the kiwi will most likely continue in the new week.

Dollar Rides on US Senate 2018 Budget Approval

The US dollar rode the market during the Asian section, gaining against every other major currency. The dollar is feeding off news that the US Senate has adopted the 2018 Budget hence, gives room for speeding up consideration of President Donald Trump’s plan to enact tax cuts. The final approval of the budget unlocks a special procedure which allows Republican to pass a tax code rewrite without Democratic support.

Data from the US on Thursday showed decline in unemployment claims and a rise in Philly Manufacturing index. Friday will see the release of existing home sales which analyst forecast will drop to 5.30m from 5.35m.

The announcement of a coalition government between the Labour party and New Zealand First turned investors against the kiwi on Thursday. Citizens on September 23rd 2017 had voted an hung parliament with the ruling National party winning 56 seats and a Jacinda Ardern led Labour party won 46 seats, both falling short of the 61 needed to hold the reins of power. With 9 seats, New Zealand First held the balance of power, its decision on who to form a coalition with will determine who became prime minister. Winston Peter leader of New Zealand first on Thursday noted that regional development, addressing the infrastructure deficit and improving the lives of New Zealand’s most vulnerable people, would be priorities for the new government. Investors had anticipated a coalition government between the National party and New Zealand first which they were more comfortable with as the incumbent had returned the economy to a budget surplus and maintained economic growth for 8 years. The Labour party has promised to ruffle feathers with its immigration restrictions and changes it intends making to the Reserve bank of New Zealand if voted into power. The NZD plunged to 0.7030 from 0.7156.

The New Zealand economy thrives on its robust tourism sector, m/m visitor arrivals in New Zealand released on Thursday evening, showed 0.3% rise, while credit card spending showed a drop to 4.9% as released early Friday morning.

The Euro stayed unaffected by the tension brewing in Catalonia, as Carles Puigdemont ignored Prime Minister Rajoy's ultimatum. The prime minister awaits the senate's approval to invoke article 155 on Catalonia. The Euro continued its upward movement as EUR/USD rose to 1.185 with no major economic data released from the Euro-area on Thursday. Germany's PPI and the Euro-area's final current account are data to look for today. The coming week will be laced with flash PMI numbers for the Euro-area. Investors seem to be viewing the Catalan crisis as an internal problem in Spain, an opinion that might change if the article 155 is approved.

EU leaders started a two day meeting in Brussels on Thursday. The meeting which was supposed to focus on Brexit is moving past that as Britain seems confused at the moment. The meeting will now focus on the Catalan crisis, the Iranian nuclear agreement and deepen integration among EU members.

The British Pounds traded lower on Thursday against the dollar as GBP/USD fell to 1.3150. This is a spin-off from a 0.8% decline in retail sales in Britain in September erasing all the gains made the prior month. Retail sales dipped on the back of higher cost, the senior statistician noted that increased costs are reflected in the more rapid growth in the amount spent when compared with the quantity bought. Consumers in the UK are feeling the heat as inflation is well above wage growth, if inflation is taken into account wages actually dipped by 0.4% y/y. Imports have become more expensive on the back of a weaker pound. CPI in Britain at the moment is 3% well above the BoE's target inflation. Though the BoE remains positive on interest rate hike, soft economic data might force the apex bank to reconsider.

The Aussie got propped up on Thursday given positive employment data and growth in the Chinese economy. The AUD feeds off positive news from China given Australia's export relationship with China. Though Q3 GDP dropped to 6.8% as forecasted, industrial production jumped to 6.6% from 6% the prior period. According to the IMF, Asia accounts for 63.3% of the world's economic growth. Chinese president Xi Jinping at the twice a decade communist party congress noted that China accounts for 30% of global growth. The People's Bank of China's governor Zhou Xiaochuan has forecasted a 7% growth in GDP in the second half of the year.

The Canadian dollar has the floor today m/m CPI and core retail sales are to be released later in the day. The loonie traded flat against the dollar for most part of Thursday, after riding on the wave of a 1.6% rise in manufacturing sales on Wednesday which stalled a decline streak.

Gold reversed losses from three trade session on Thursday climbing as high as 1,290. The yellow metal however edged lower during the Asian session on the back of positive USD news. Brent crude closed 0.02% higher at $57.24.

Brexit Deadlock Holds Down GBP

Shopping for a new Fed chair is under way, as news coming from the US reports Mr Taylor John had an impressive interview last week with president Trump. This drove the dollar northward, as Taylor John is known for policy rules in line with higher interest rates. The dollar gained momentum, as Investors opine a Taylor led Fed would raise interest rate early 2018. The present Chairperson of the Fed Janet Yellen is expected to hold her interview with the president later this week, as her tenure ends February 2018. The dollar gained with GBP/USD falling to 1.3154 from 1.3268. Housing starts and building permits are the two major economic indicators on the dollar's calendar today. Both of which are not looking so good in terms of analyst forecast, this gives life to the notion that the rise in the dollar will be short-lived.

Despite a Consumer Price Index (CPI) of 3%, the British Pounds couldn't hold its own against other major currencies as GBP/USD shed 0.58% to trade at 1.3154. CPI, the primary gauge of consumer spending, rose to 3% y/y given the effect of a weaker pound on imports. The currency has shed 12% since the Brexit Referendum in June 2016. The rise in CPI gives support to the BoE's plan of a rate hike in November. The BoE governor testifying before the Treasury Select Committee in London on Tuesday noted he expected inflation would peak in October or November, and that the bank had refrained from acting earlier to raise rates in order to lower inflation, saying that high inflation was a "trade-off" in order to hamper the economy.

The decline in the pound comes on the back of the Brexit talks deadlock. Theresa May is pushing for trade talks with the EU, but the EU won't talk trade with the UK until conclusions are reached on Britain's payment when it leaves the European Union, the status of the border with Northern Ireland and the jurisdiction of the European High Court on European citizens living in the UK. The EU could hold off trade talk with the UK till 2018. The BoE governor noted that the Bank has made contingency plans in case no agreement is reached between both parties. British businesses are however soliciting for an agreement, and want a 2-year interim period, such as a temporary customs union with the EU, in order to soften the blow of leaving the EU. Data on wage growth and unemployment are expected by 9:30am Wednesday.

The Euro traded a little lower on Tuesday on the back of lower than expected German ZEW economic sentiment report. The report which is an indicator of investors/analyst sentiment on the economy in coming months didn't reflect the present boom in the German economy, falling 2.5 points short of analyst expectations to 17.6. Final CPI for the Euro-area was in line with expectations while, the ZEW economic sentiment for the whole of Europe was also 7.5 points below analyst expectations to 26.7. Focus will be on ECB President Mario Draghi's speech at the ECB conference in Frankfurt 9:10am Wednesday.

The drama continues in Southwestern Europe as Carles Puigdemont refuses to state an outright 'Yes' or 'No' on Catalonia Independence. Spanish Prime Minister Mariano Rajoy has given till Thursday for a clear answer on Catalonia's Independence; else, Article 155 of the Spanish Constitution will be exercised. This spells doom for Carles Puigdemont as the exercise of Article 155 implies an end to the Catalan Parliament. A significant number of companies are leaving Catalonia for other parts of Spain and S&P noted the region could face a recession if it declares Independence. Though the Euro seems unaffected by this drama at the moment, the effect of increased tension in Catalonia on Spain (the Euro-area's fourth largest economy) would weigh heavily on the Euro.

The loonie edged lower against the dollar in Tuesday's trade. M/M manufacturing sales are expected from Canada on Wednesday. Donald Trump's take on the North American Free Trade Agreement (NAFTA) does no good to the Canadian economy. The regional agreement has been up for debate between the three parties involved (US, Canada & Mexico) with no conclusive agreement reached. The US President has threatened to scrap the agreement and sign a new one with Canada. Should he make true his threat, the Canadian dollar has been forecasted to dip by 10% by the Bank of Canada. The Canadian dollar could feed off the fight between Iraq and Kurdistan, as rising oil prices is in favor of the Canadian economy.

The Australian dollar, early Tuesday traded lower against the dollar on the back of dovish monetary policy stance but gained momentum later in the day. Data coming from the country early Wednesday shows Melbourne Institute index turned positive to 0.1% from negative 0.1% the prior period. Employment data from the country & Chinese GDP numbers are expected tomorrow, both economic indices will impact the direction of the AUD. Most importantly the Chinese government’s twice a decade party congress on Friday is to look out for. Early hours trading shows slight gains for the AUD moving from a low of 0.7841 to 0.7857 against the dollar.

Gold permuted on the back of its negative correlation with the dollar. The metal which was back above 1,300 as at Friday fell to 1,284.70. News on Taylor John as favorite for Fed Chair, gave the dollar a boost hence, permuting gold. Heightened tensions in Spain later in the week could shoot Gold back up as it is considered a safe haven in times of uncertainty/volatility. Oil prices continued northward following Iraqi-Kurdish fight. On Tuesday, the Iraqi army occupied the city of Kirkuk, which is located in an oil-rich region. Continued fights in oil rich regions raises oil prices, brent crude stood at $58.27 rising 0.67%.

Catalonia, Austrian Elections and German Coalition Talks Trails the Euro

The GBP was first in line for the release of economic data for the week. Rightmove Housing Permit Index (HPI) showed improvement as it rose to 1.1% in October from -1.2% the prior month. This signals investors’ appetite for buying houses in the UK is growing given lower prices, a spin off from the uncertainty generated by Brexit. It is pertinent to note that the Sterling performed best amongst its pairs in the prior week. This comes on the back of the news that the EU could give a 2 year Brexit extension to UK under the conditions that the latter will fulfill all obligations as a member country, however, UK will be required to give up its voting rights. It was reported that the draft paper submitted by European Council President Donald Tusk indicates that talks on free trade could start as soon as December. This redeemed the pound from the sell off brought about by Brexit negotiations deadlock. During the Asian section today, the GBP traded flat against the dollar on the back of low volumes. We expect the GBP will have a noiseless day, the release of CPI and PPI numbers will shake up the currency.

AUD was headed south against the dollar during the first 4 hours of trading despite positive data coming from China during the section. Usually AUD feeds off positive news from China given Australia’s strong trade relations with the Asian giant. China's Consumer Price Index (CPI) was in line with analyst expectations rising 1.6% y/y while Producer Price Index (PPI) surpassed forecast by 0.6 percentage points, rising to 6.9% in September. The People’s Bank of China Governor Zhou Xiaochuan, at a seminar in Washington on Sunday, however highlighted huge corporate debt as a challenge. S & P recently downgraded China to A+ on the back of its huge debt profile. Though Monetary Policy minutes from the Reserve Bank of Australia will come in tomorrow it is expected to be uneventful given the effect of low wage rate growth and high level of household debt on interest rate. GDP numbers from China later this week will however impact the AUD more. Analysts expect a 6.8% rise in China's GDP, while People’s Bank of China Governor Zhou Xiaochuan has predicted a 7% rise in GDP.

The dollar suffered a big sell off last week on the back of dovish FOMC minutes and soft CPI numbers. It dropped to 1.247 against the Canadian dollar, also trading low against the Australian dollar to close at 0.789 the prior week. Though expectations of a rate hike for December still holds as reiterated by the Fed's head, Janet Yellen on Sunday, it is dependent on economic data to be released before December. The dollar's week will be trailed with volatility given the decertifying of the Iranian deal by President Trump and the continued face off with North Korea.

The Euro shone the prior week as Catalonia eased its reins on declaring Independence hence, putting investors at ease. The currency gained over a 100pips rising to 1.188 against the dollar. But investor's breathe will be held on the Euro till 10am this morning, when Catalonian president Carles Puigdemont is expected to give a clear yes or no to the declaration of Independence to the Spanish government. Catalan television station TV3, which is controlled by the regional government, said Puigdemont will not give Rajoy (the Spanish Prime Minister) a clear ‘Yes’ or ‘No.’

This may result in tensions in Catalonia as the Spanish government is ready to sideline the authorities in Catalonia and take over the administration of the region if independence is declared. Elections results in Austria which is tilting in favour of the Freedom Party and coalition talks in Germany will weigh heavily on the Euro this week.

In other news, New Zealand's CPI q/q data will be released later in the day. Analyst forecast show a 0.4% rise. While Canadian m/m CPI data is expected later in the week.

On the commodities side, Gold rebounded in the prior week trading above the 1.300 psychological level. This comes on the back of the volatility in the market in the course of the week, as the yellow metal is seen as a safe haven. Continued sell off on the dollar will aid Gold's upward trend. OPEC remains bullish on oil demand, predicting a healthy growth of crude demand over the next 5 years. Iraqi forces however moved to take over oil fields in the northern city of Kirkuk from Kurdish forces on Sunday, pushing up crude prices amid reports of deadly clashes. Brent Crude stood at $57.81 rising by 1.12%.

China Sneezes Aussie Catches A Cold

Caixin Services PMI, an index that captures both services & manufacturing performance of China declined in September to 50.6. The release of this index saw the Australian dollar plunge to 0.7751 (as at the time of writing) this comes on the back of Australia being a major source of raw material export to China. Lower client demand and marginal rise in input cost dragged down the index in September. The index which showed China's Services sector grew the weakest in 21 months in September just might be reflecting the Chinese economy in the 4th quarter of the year. The bearish sentiment on AUD will most likely be retained for the rest of the day as the bank holidays in US, Canada & Japan has pared volumes.

The Euro area was awash with positivity as the German Industrial Production and Sentix Investors Confidence indices both showed significant growth. The German Industrial Production index turned positive, beating analyst expectations by 1.7 to 2.6, while the Sentix Investors Confidence index which is an opinion poll of analyst & investors on their outlook of the economy, rose to 29.7 from 28.2 in August. This signals the German economy is moving past the Bundestag hung election results and investors are bullish about the performance of the Eurozone economy in the coming months. This notwithstanding the Euro traded flat for most part of the day ranging between 1.1728 & 1.1755 as the US, Canada & Japan are on a bank holiday.

The Kiwi traded flat for most of the day, closing at 0.7063 which is just 2 pips higher than its open price. New Zealand's final election results were made public on Saturday and the result showed no clear winner. Majority of the votes were divided between the two most prominent parties the National and Labour party. At the final count, National had 56 seats while, Labour held 46. This means both major parties would have to seek a coalition with other political parties. The next best party, New Zealand First with 9 seats has hinted that it would announce which party to form a coalition government with on the 12th of October 2017. Analysts are of the opinion that New Zealand First will settle with National Party given its conservative ideology. Investors are uncomfortable with a Labour party win as Labour leader Jacinda Ardern has promised to ruffle feathers with her immigration policy and monetary policy change.

US negotiations with North Korea seem a waste as Kim Jong Un has threatened to test missiles reaching the US' west coast. This led to a free fall of the dollar at market opened on Sunday losing gains from the release of non-farm payroll data. The US army is getting ready for a war with North Korea. This will put a lot of pressure on the dollar in the coming days and a rise in safe havens like the Yen and Gold.

On the energy side of things, Saudi Arabia's oil company, Aramco announced it would be cutting its oil supply by 569,000 barrels a day in November despite high customer demand. This is the deepest cut in its history. This shows the countries commitment to getting oil prices back on a bullish run. At the announcement, Brent crude erased declines to trade marginally higher at $55.62 per barrel.

Gold returned to the greens after the doldrums recorded the prior week. It rose to 1,275.24 from its close price of 1,260.51 the week before, as the news of North Korea's planned missile test in US stirred volatility. The yellow metal since falling from the psychological 1.300 three weeks back has been on a downward spiral, continued volatility in the market will keep Gold in the greens.

Foreign Investors Pick Consumer Goods, Financial Services as Attractive Investment Sectors

The Nigerian economy is seemingly on the upturn and remains an attractive destination for foreign investors, seeking sustainable growth opportunities within the continent, according to findings by KPMG.

The consumer goods, financial services, telecommunication, media and technology, oil and gas sectors accounts for about 80 per cent of recent inbound investments into the country, the professional services firm stated in its report entitled: “Doing Deals in Nigeria – Key Insights from Deal Makers.”

The report was the result of a survey of 50 senior business executives based outside of Nigeria, who had attempted, at least one, inbound acquisition in Nigeria in the last four years.

About 62 per cent of the respondents were from five countries – South Africa -accounting for the largest percentage (20 per cent); closely followed by United Kingdom (18 per cent) and United States (12 per cent).

Other notable countries with interest were France (six per cent) and Netherlands (six per cent). The survey showed that 62 per cent of the respondents surveyed, would consider an acquisition in Nigeria over the next two years, while 86 per cent of respondents indicated that they would more likely invest in Nigeria again.

The report further noted that the key drivers for Nigerian acquisitions by foreign investors included the target’s customer base and domestic distribution channels and the opportunity for the investor to restructure the businesses to create further value.
The ability of global corporates and private equity firms to use Nigeria as a base for expansion across West Africa further raises the country’s investment destination profile.

The Partner and Africa Head, Deal Advisory and Private Equity, KPMG in Nigeria, Dapo Okubadejo said: “Our key objective in conducting the survey for this report was to hear first-hand from foreign investors.
“The survey report shares the contributors’ unique insights and perspectives on their deal-making experiences in Nigeria, providing a direct credible feedback to potential investors on the true potential of Nigeria and what to expect in doing deals.

“The report also identifies the key sectors, deal dynamics, leading practices and recognises challenges in doing deals in Nigeria.”
Despite the general positive tone to the report, respondents, however, noted some critical challenges to deal making in Nigeria.

According to the report, key amongst the challenges to investing in Nigeria include: political trends (76 per cent); lack of information/transparency on the target companies (74 per cent), challenging compliance requirements (66 per cent) and the lack of physical infrastructure in the country (50 per cent). It noted that the lack of physical infrastructure in the country was the most important of all perceived challenges to investing in Nigeria.

“This challenge further buttresses the attractiveness of companies with effective distribution channels and route-to-market infrastructure as acquisition targets,” it added.

The report also noted the leading practices for successful deals in Nigeria, top of which was the need to engage the right local advisers with the right relationships and understanding of cultural nuances, considering that about 70 per cent of the deals are with privately-owned businesses with bilateral ‘off-market’ negotiations.

Speaking on the implications of the survey findings, Okubadejo said, “We sincerely hope that the findings in this report will contribute to Nigeria’s policy direction, with regards to foreign investments.”