E-Financial
Forex: Overview on the 2017 Key Market Themes
Hussein Sayed, chief market strategist at FXTM provides an overview on the 2017 key market themes. Whether you consider 2016 a good or a bad year, it was by no doubt the year of surprises. Not just because Donald Trump was elected the 45th president of the United Stated or because the UK decided to leave the EU, but the markets’ reactions to these events were even more surprising and most forecasters got it wrong.
A new year has started and many questions remain to be answered; here are some of the most asked questions for 2017: Will the Trump rally carry on? How many rate hikes will the Fed deliver? What is the future of the UK and the EU? Will OPEC finally balance the oil markets?
Will The Trump Rally Carry On?
Following the election of Donald Trump on November 8, all U.S. major indices recorded new highs.
The Dow Jones industrial average rose 8%, S&P 500 and Nasdaq composite gained 5%, and the small-cap stock market index Russell 2000 outperformed its peers rising by more than 13%.
From a market valuation perspective, very few may disagree that stocks are expensive, but the expected combination of fiscal stimulus and deregulation for some sectors under Trump’s presidency were the main catalysts for the rally. Of course, financial markets tend to price in events before they occur, but this time I believe investors have priced in most of the good news, and it requires very strong corporate profit growth to keep this bull market alive.
Predicting the end of the bull market is a tough call, but the downside risk in 2017 is likely to be larger than the upside potential. If U.S. policy makers succeed in delivering the anticipated growth we can see another 5 – 10% gains in U.S. stocks, but failure to do so will cause a steep selloff that could exceed 20%.
Day traders may be luckier than investors in 2017 as a new indicator has been added to their watch list: Trump’s twitter account.
On December 6, Trump tweeted “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!”, few seconds later Boeing stock wiped almost $1 billion from its market cap. We expect to see more of these tweets in 2017 and algorithms will probably require long time to put them into play, leaving retail traders with opportunities to profit from such market disruptions.
How Many Rate Hikes Will the Fed Deliver?
2016 kicked off with the expectation that four rate hikes would occur, but only one was delivered in December.
Although it was anticipated that the Federal Reserve will be more cautious in their forward guidance for 2017, December’s meeting took many economists by surprise as they hinted for three rate hikes.
Since the financial crisis in 2008 the Fed has got many things wrong, whether it is forecasting rate hikes, economic growth and inflation levels, and now with a new administration to take office on January 20, this could make the Fed’s projections even more complicated.
Inflation has always been the main justification for low interest rates, but now, even before Trump takes office, a couple of inflation gauges are running above 2%. The Fed did not account for any fiscal stimulus measures in their most recent projections, suggesting that huge shifts in expectations may be seen.
The rising U.S. dollar which is currently at a 14-year high is another source of worry for the Fed, and tightening too fast will lead to even stronger dollar hitting U.S. exports and multinational companies’ profits.
If Trump’s measures were passed and economic growth picked up, the Fed will have few options, either tightening monetary policy more aggressively, or to fall behind the curve and let the fixed income market lead the way, but three rate hikes in 2017 is my base case. Either way the dollar is likely to remain strong as divergence in monetary policies will continue to widen.
Future of the UK and the EU?
Hard, Soft or Grey Brexit. This was the most argued topic in the past six months, and until now there’s no clear path on what direction the UK will move.
The pound ended 2016 17.5% lower against the US dollar since June 23 and there’s lot of speculation on how it will end in 2017. Of course, much will depend on the path Britain will choose.
Theresa May promised to trigger Article 50 by the end of March, but we still need to hear from the Supreme Court on whether the UK government needs parliamentary approval before starting the withdrawal from the EU.
The delay in triggering Article 50 will be positive in the short term for sterling, and negotiations may last well beyond 2017 on the terms of Brexit.
Meanwhile investors will be focusing on the economic developments and the direction of the Bank of England’s monetary policy, which will probably be the second major central bank to raise rates after the Fed.
Politics within the EU will rule investment decisions in 2017. Germany and France, the two largest economies will hold elections amid the rise of Eurosceptic candidates.
Italy is likely to see an early vote, after the resignation of Matteo Renzi last month, and the Five Star Movement has vowed that if it wins power it will hold a referendum on whether Italy should leave the Eurozone.
Although many polls indicate that far right candidates are still behind, nothing should be taken for granted after Trump won the U.S. presidency and Britain voted to leave the EU. Expect to see more pressure on the Euro and look out for parity against the dollar in the first six months.
Will OPEC finally balance the oil market?
After hitting a low of $27 a barrel in February 2016, Brent prices more than doubled by the end of year and many investment banks still see further increase in prices for 2017.
OPEC’s decision to cut its output by 1.2 million barrels a day starting January, and non-OPEC producers to cut 558K barrels for the next six months to drain record global oil inventories led Brent prices to post its first yearly increase since 2012.
Whether more appreciation is to be seen in 2017 will depend on multiple factors, and the biggest one currently looming is compliance to production cuts. It’s in no one’s interest not to comply, but historic figures show that delivering on previous production cuts has been poor.
U.S. producers are another element to be focused on, how fast shale may come back is a key component to be considered in the price equation.
Although Trump has made the energy sector part of his economic growth plan, I believe it won’t have a lot of impact if prices don’t hold up. The dollar strength will likely impact the demand side, as continued strength will make oil more expensive in other currencies.
With all these unknows we will likely see prices moving in tight ranges in the first quarter until we get a clearer picture.
National Insurance Commission (NAICOM) has declared that it has no plans to extend the 31 July 2026, deadline for the ongoing insurance industry recapitalisation exercise, asserting that the date is firmly rooted in the new Insurance Act.
Speaking at the investiture of Mr Akinjide Oluwarotimi-Orimolade as the 53rd president of the Chartered Insurance Institute of Nigeria (CIIN) in Lagos, Olusegun Omosehin, commissioner for Insurance, emphasised that the exercise remained central to building a resilient market.
With less than two weeks left before the window closes, the regulator commended operators making steady progress but stressed that the timeline must be treated with absolute urgency.
Omosehin said, “A stronger capital base must translate into stronger service delivery, prompt claims settlement, improved consumer protection, and a market that Nigerians can trust.
“The industry’s future will be determined by the quality of leadership, depth of competence, and discipline in serving the public interest.”
The ongoing exercise follows the historic signing of the Nigeria Insurance Industry Reform Act by President Bola Tinubu, which effectively repealed the outdated 2003 Insurance Act. Under the new framework, the sector is transitioning from a static baseline model to a dynamic risk-based capital structure. This regulatory shift aims to fortify operators against systemic economic shocks and better position the industry to contribute significantly to the Federal Government’s target of a $1tn economy.
Consequently, the exercise requires a massive capital lift across the board, pushing life underwriters from N2bn to N10bn, non-life operators from N3bn to N15bn, and reinsurers from N10bn to N35bn.
The push comes amid strong legislative alignment, with the National Assembly pledging its full backing to ensure these reforms translate into deeper market penetration.
Also speaking at the event, Ahmadu Jaha, chairman of the House of Representatives Committee on Insurance and Actuarial Matters, reaffirmed the parliament’s dedication to providing the necessary legal frameworks to drive sector growth.
Jaha said, “As Chairman of the House Committee on Insurance and Actuarial Matters, I wish to reaffirm the unwavering commitment of the House of Representatives to supporting legislative initiatives that will strengthen the insurance industry, improve regulatory effectiveness, enhance consumer protection and promote wider insurance penetration across Nigeria.
“The National Assembly recognises the critical role of the insurance industry in mobilising long-term capital, financing infrastructure development, protecting businesses and households against unforeseen risks, promoting financial stability and driving sustainable economic growth.”
Responding to the charge, the newly inaugurated Orimolade, president, CIIN, stated that his administration would aggressively protect the public interest by advancing the core mandates of the institute.
Orimolade promised “to build on the programmes of my predecessors while evolving new ideas that can further increase insurance education, awareness and acceptance across the country.”
Federal Competition and Consumer Protection Commission (FCCPC) has resumed implementation of the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025 (DEON Regulations).
This follows the judgment delivered yesterday by Justice A.L. Allagoa of the Federal High Court, Lagos, in Suit No. FHC/L/CS/760/2026 instituted by the Wireless Application Service Providers Association of Nigeria Ltd/Gte (WASPAN).
In the ruling, the Court dismissed the Plaintiff’s Originating Summons in its entirety, declined all the reliefs sought, and upheld the validity of the DEON Regulations, holding that they were made pursuant to the FCCPC’s statutory and constitutional powers and are therefore intra vires the Commission.
The Court also upheld the validity of the specific provisions of the Regulations challenged in the suit and consequently discharged the interim ex parte order that had restrained implementation and enforcement of the Regulations.
Accordingly, the legal impediment that had necessitated the Commission’s temporary suspension of implementation and enforcement of the DEON Regulations has been removed, and the Regulations are once again fully operational and enforceable.
WASPAN had challenged the Commission’s authority to issue and implement the DEON Regulations. Upon being served with the Court’s interim order in April 2026, the FCCPC immediately suspended implementation and enforcement of the Regulations in full compliance with the Court’s directive, consistent with its commitment to the rule of law and respect for judicial authority.
Meanwhile, the FCCPC has welcomed the judgement.
Reacting, Ondaje ljagwu, director of Corporate Affairs, FCCPC, said: “The Commission has always maintained that the rule of law is fundamental to effective regulation and good governance. When the Court issued its interim order, we immediately suspended implementation of the Regulations in full compliance with the Court’s directive. Now that the Court has affirmed the validity of the DEON Regulations and delivered judgment in favour of the Commission, we will continue to discharge our statutory responsibilities faithfully, professionally and in accordance with the law.
“The DEON Regulations are designed to promote responsible lending, improve regulatory accountability, curb unfair and exploitative practices, and strengthen consumer protection in Nigeria’s digital lending market. Our objective has always been to ensure that innovation and financial inclusion flourish within a transparent, fair and accountable regulatory framework that inspires confidence among consumers, investors and responsible operators alike.
Nigeria Deposit Insurance Corporation (NDIC) has urged youths to shun investment scams and embrace the habit of saving.
NDIC said that for a nation to be prosperous, its citizens must learn to build legitimate wealth through savings and then advance to investment.
Mr Adegbenga Fagbuyi, assistant director, Communication and Corporate Affairs, NDIC, made the remarks while addressing students of Lagelu Grammar School, Ibadan, during the 2026 Financial Literacy Day.
Delivering his speech on “Smart Money,” Fagbuyi highlighted the importance of having basic knowledge of the financial system, making sound financial decisions, understanding the benefits of saving in banks, setting financial goals, maintaining financial discipline, and avoiding Ponzi schemes that promise high returns.
Fagbuyi said youths are among the major targets of the government’s financial inclusion drive, adding that the Financial Literacy Day formed part of activities marking Global Money Week, adopted by the Bankers’ Committee in Nigeria as a platform for mentoring youths on savings and investment.
He said, “The government wants everybody to be participants in the financial sector. But how can you be a participant if you don’t know how to save? How can you be a participant if you cannot convert your savings into an investment? So, most importantly, youths are one of the major targets of the financial inclusion drive of the government.”
Fagbuyi described financial inclusion as bringing everybody into the financial safety net by encouraging participation in banking, insurance, pensions, and the capital market.
He stressed that the government does not want youths to become adults who lack knowledge of safe banking practices, insurance, and the capital market.
“Government does not want them to grow old, to become adults who do not know about savings, safe banking habits, insurance, and the capital market. That is why we go to schools to sensitise students to all these basic financial matters, particularly savings, so that our students can begin to learn to save, learn credible investment habits through which they can be making legitimate income.
“We also educate them about the deposit insurance system administered by NDIC. When you save in banks, the banks are supervised and regulated. And if eventually they fail, you will not lose your money. That is what NDIC does,” Fagbuyi said.
He revealed that the sensitisation programme, which started about 10 years ago and is organised by the Bankers’ Committee, comprising the Central Bank of Nigeria, the Nigeria Deposit Insurance Corporation, and all the deposit money banks in Nigeria, has been held across states nationwide.
He said, “Minimum, every year, we go to 10 states. And we normally sensitise 200 students in each school. So this year, that means we are targeting 2,000 students.”
Fagbuyi, however, said the objective of the programme is not to cover all schools across the country but to set a standard for state governments and schools to replicate.
“But I must emphasise that the objective is not to cover all schools. It is to set a standard for state governments and for schools to replicate. You agree with me that we cannot be everywhere.
“But as a partner, as a key stakeholder in the financial inclusion drive of the federal government, we go to states to showcase what the government’s intention, so that states and schools can replicate. So it is on this note that we always urge states’ Ministries of Education, Science and Technology to replicate and expand these programmes across their respective states.”
In his address, Olusegun Olayiwola, Oyo State Commissioner for Education, Science and Technology, represented by Alhaji Lukuman Kareem, permanent secretary, Education Inspectorate, Ibadan North, commended the NDIC for selecting a school in Ibadan for the financial literacy sensitisation programme.
He noted that such initiatives must go beyond the classroom to shape young minds, adding that children cannot achieve expected outcomes unless they are properly guided.
“That’s why we significantly appreciate the efforts of the Bankers’ Committee, NDIC, the Central Bank of Nigeria, and all other members for this,” he said.
The commissioner charged the students to take the lessons seriously, noting that opportunities lost may not be easily regained. He also advised the NDIC to expand the programme to include students from neighbouring schools in future editions to maximise its impact without additional transportation costs.
Additionally, Olayiwola urged teachers to cascade the training to other students, who should in turn enlighten their siblings at home.
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