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Investors On Edge Ahead of NFP

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FXTM Research Analyst Lukman Otunuga comments on Gold charged to a fresh 5 month high at $1269 during early trading on Friday after reports were released that the U.S military launched an airstrike on Syria which soured risk appetite.

A strong sense of unease infiltrated the financial markets during trading on Friday with investors staying clear of riskier assets after reports were released that the U.S military launched an airstrike on Syria.

The possible threat of geopolitical tensions heightening from the airstrikes has created a risk-off trading atmosphere which left Asian shares mixed.

The lack of upside momentum from Asian markets has already contaminated European equities with the diminishing appetite for risk potentially limiting gains on Wall Street this afternoon. It must be kept in mind that participants were already jittery ahead of the Trump-Xi summit and this fresh development may compound to the horrible cocktail of uncertainty.

Trump-Xi summit round 2
Although the Trump-Xi summit has been somewhat overshadowed by the US strike on Syria, investors may still pay very close attention to how the meeting between these two world leaders progresses.

While Donald Trump has said that he has developed a friendship with Chinese President Xi Jinping, this may be tested today as the two leaders discuss trade, North Korea, and other important market moving issues.

A situation where the outcome of the meeting seems unfavorable and unsuccessful could intensify the risk aversion ultimately boosting Gold.

NFP in the Spotlight
The solid ADP report and hawkish Fed minutes this week have allowed the Greenback to regain its attitude with the Dollar Index trading around 100.78 as of writing. With short-term bulls simply looking beyond the Trump uncertainties and focusing on positive economic data, the Dollar could be poised for further upside.

Investors may direct their attention towards the pending NFP report this afternoon which could offer some insight to how the US labor force fared in March.

A blockbuster NFP figure that exceeds expectations coupled with a surprise rise in average hourly earnings could boost the Dollar further. From a technical standpoint, the breakout above 100.75 could open a path higher towards 102.00.

Gold Breaks Above $1260
Gold charged to a fresh 5 month high at $1269 during early trading on Friday after reports were released that the U.S military launched an airstrike on Syria which soured risk appetite. With risk aversion set to heighten as markets ponder over the ramifications of the U.S airstrike, Gold and other safe-haven assets may receive a solid boost.

While there is a possibility of a positive NFP report pressuring Gold prices, the downside shocks may be limited by the jitters.

From a technical standpoint, bulls need a solid daily close above $1260 for a further incline higher towards $1300.

Commodity spotlight – WTI
WTI Crude was propelled towards $52.90 on Friday after the U.S airstrikes on Syria sparked speculations of a threat to supplies. Although the sharp upsurge in prices has turned oil somewhat bullish on the daily charts, the bearish fundamentals remain intact. With the oversupply concerns still a dominant theme in the oil markets, extreme upside gains may be limited.

From a technical standpoint, bulls have won the battle this week with prices breaking above $52. For the upside to continue and display sustainability, a solid breakout and daily close above $53 will be needed. In an alternative scenario, bears have a chance to reclaiming control back below $51.


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E-Financial

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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Buhari Okays Establishment of CBN-Led Infraco

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President Muhammadu  Buhari has approved the establishment of an   Infrastructure Company (Infraco) to be driven by the Central Bank of Nigeria (CBN) in partnership with the African Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority (NSIA).

Buhari Okays Establishment of CBN-Led Infraco

Mr. Godwin Emefiele, CBN governor

This is coming  on the heels of the foreign reserves’ slump to $36 billion following a cocktail of monetary policy interventions by the apex bank to cushion the scathing effects of the COVID-19 pandemic on the economy.

Mr Godwin Emefiele, CBN governor, made these disclosures in Abuja at the annual conference of the Chartered Institute of Bankers of Nigeria (CIBN) with the theme: Facilitating a Sustainable Future: The role of Banking and Finance.

According to him, Infraco would enable the use of private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.

“This entity would also be able to raise funds from the capital markets and mobilise long term finance to address some of our infrastructure needs, while providing reasonable returns to investors. “We believe this well-structured fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.

“A well-built infrastructure system, comprising hard infrastructure such as roads and ports, and soft infrastructure such as broadband penetration, can have a multiplier effect on growth by enabling the expansion of business activities in the country”, he explained.

On foreign reserves, Emefiele attributed its crash to the decline in foreign exchange earnings and subsequent adjustments in the value of the naira to the dollar.


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