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FXTM Analysis: French Election Relief Rekindles Risk Sentiment

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FXTM Research Analyst Lukman Otunuga comments on the potential market effects of the forthcoming French presidential elections.

Financial markets received a solid boost during early trading on Monday, after Centrist Emmanuel Macron secured a position in the second round of the French presidential elections. With Macron’s market-friendly, first round victory dissolving some risks associated around a potential anti-establishment shocker, the Euro lurched to fresh five-month highs above 1.0930. Although this risk-on sentiment could support the Euro in the short term, upside gains may face obstacles if uncertainty starts to mount once again ahead of the second round of voting on 7 May. While expectations remain somewhat elevated over Macron becoming the next French President, the live threat of an unexpected Trump-style victory by Marine Le Pen could still expose the Euro to downside shocks.

From a technical standpoint, although the sharp appreciation on the EURUSD has made prices bullish on the daily charts, questions should be asked about the longevity of the current rally. Bulls need to secure a daily close above 1.0900 to open a path towards 1.1000. In an alternative scenario, weakness below 1.0800 could open a path towards 1.0750 and lower.

Greenback Stumbles into New Week
The Dollar Index found itself pressured below 100.00 last week, after the combination of soft economic data and fading rate hike expectations enticed sellers to attack.

Although U.S President Donald Trump has announced that a big tax reform and tax reduction will be announced this Wednesday, markets have received this news with a big pinch of salt.

The skepticism over Trump’s ability to deliver is becoming quite visible and the growing threat of fiscal spending falling short of expectations may potentially punish the Dollar further.

From a technical standpoint, prices have commenced the trading week under renewed pressure and a break below 98.80 could open a path lower towards 98.50.

Stock Markets Uplifted by Macron
Global stocks were mostly higher during Monday’s trading session, as participants mulled over the market-friendly outcome of the first round of the French Presidential elections. With Macron’s impressive performance and victory in the first round easing some Frexit-related concerns, stocks in Asia and Europe marched into gains.

The newly found appetite for risk should support Wall Street this afternoon. While stock markets have the ability to edge higher in the short term as a result of this relief, potential anxiety ahead of the second round of voting and ongoing Trump uncertainties still have the ability to limit gains.

Commodity spotlight – Gold
The renewed appetite for riskier assets has reduced Gold’s glimmer on Monday, with the metal trading around $1270 as of writing.

While the current risk-on environment has the ability to expose the yellow metal to further losses, bulls remain in control above $1260. With uncertainty likely to heighten ahead of the second round of the French elections in the coming fortnight and Brexit developments weighing on sentiment, bulls still have a chance to send prices higher.

From a technical standpoint, the candlesticks are still trading within the daily bullish channel while the MACD points to the upside. A break back above $1280 could open a path higher towards $1280. A daily close below $1260 invalidates this daily bullish setup.

 

 


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E-Financial

CBN Investigates 55 Companies over Forex Infractions

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Amidst sustained pressures on Nigeria’s official foreign exchange resources, the Central Bank of Nigeria (CBN), has opened investigations into foreign exchange transactions of 55 companies and individuals.

The apex bank linked them to foreign exchange deals outside the official Investors & Exporters (I&E) window.

CBN Investigates 55 Companies over Forex Infractions

Mr. Godwin Emefiele, CBN governor

The I&E window was created by the CBN as the legitimate platform for buying and selling of foreign currencies.

Some of the major corporate organisations in the list include Stallion Nigeria Limited, a conglomerate involved in several sectors of the Nigerian economy.

The list also includes Nigeria’s leading electronic payment company, Interswitch Nigeria Limited, as well as a leading global shipping line, CMA CGM Nigeria Shipping Limited.

Other big names in the list include Petro-Afrique Energy Services Limited, Steel Force Far East Limited, Auto Petroleum Company Limited, Cavendish Mechanicals Limited, Aquashield Oil & Marine Limited, Haitch & Elf Integrated Services Limited, Fenog Nigeria Limited, and Promasidor Nigeria Limited.


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FG Makes u-Turn on Bank Account Re-Registration

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Federal government on Friday apologised for asking all account holders in financial institutions in the country to re-register their personal details.

FG makes u-Turn on Bank Account Re-Registration

Recall that the federal government had on Thursday ‎ordered that all persons holding accounts across financial institutions and insurance firms should complete and submit self-certification forms to their respective financial institutions.

The notice issued by the government to that effect read, ‎“This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc.) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions.

“Persons holding accounts in different financial institutions are required to complete and submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures, in line with the Income Tax Regulations 2019.‎”

The directive raised eyebrows, as account holders already possessed Bank Verification Numbers.

Following widespread condemnation that trailed the directive, the Federal Government backtracked on Friday, saying the fresh guidelin‎e was not for all Nigerians.

The government attributed the development to misinformation.

The clarification issued by the government on Friday read, ‎“We apologise for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the notice does not apply to everybody. ‎FIRS will clarify Nigerians on the objectives of the directive.”

Also on Friday, FIRS, in a statement posted on Twitter, explained that the guidelines were only for non-residents, as well as people paying tax in more than one country.

Parts of the FIRS statement read, “The Self Certification Form is basically to be administered on Reportable Persons, holding accounts in Financial institutions, that are regarded as “Reportable Financial Institutions” under the CRS.

“Reportable persons are often non-residents and other persons, who have residence for tax purposes in more than one jurisdiction or country.”

“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes, for the KYC and AML purpose.”


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Stanbic IBTC Bank Disowns Lagos ATM Fraudster

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Stanbic IBTC Bank PLC has disowned Tope Olajide, 22-year-old fraudster arraigned for theft of customers deposits.

Stanbic IBTC Bank Disowns Lagos ATM Fraudster

The Bank said this in a statement on Wednesday.

The statement said: “The attention of the management of Stanbic IBTC Bank PLC has been drawn to news currently circulating in the media, about the alleged arraignment of staff of the Bank on charges bordering on the theft of customers deposits.

“The Bank would like to clarify that the defendant, a 22-year-old Tope Olajide, IS NOT, and was at no point in time an employee of Stanbic IBTC Bank PLC.

“The alleged culprit was apprehended around 7:30 am, on Thursday, 27 August 2020, by security operatives after he was exposed by CCTV footage using ATM cards he had allegedly stolen and converted, to make withdrawals from the accounts tied to the stolen ATMs.

“The CCTV footage also showed the alleged culprit pretending to assist customers at ATMs whilst also attempting to fraudulently dispossess the customers of their ATMs.

“He was subsequently arraigned before an Ikeja Magistrate Court on Monday, 14 September, for stealing the debit cards of two customers and using them to unlawfully withdraw the sum of N427,000.

“The Bank would also like to implore members of the public to be security conscious when conducting transactions at ATMs. Customers are advised to report any suspicious actions around them to security operatives who are usually stationed around the Bank’s ATMs, when carrying out transactions at any of our ATM locations.

“As an organisation, we hold dear the values of integrity, and we will continue to prioritise the safety of our customers effectively.”


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