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Forex: Overview on the 2017 Key Market Themes

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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.

 


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Access Bank Unveils DiamondXtra Season 16, Dangles N200m, 3 SUVs

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The sixteenth season of DiamondXtra, a savings and reward account where customers of Access Bank are rewarded with several prizes, have been unveiled in Lagos.

Access Bank Unveils DiamondXtra Season 16, Dangles N200m, 3 SUVs

 L – R : Doris Okpara, Product Manager, DiamondXtra; Ngozi Igboanugo, Regional sales Manager Festac 1&2 & mainland Access Bank; Bolarinwa Animashaun, Regional Sales Director Lagos 2 Access Bank ; Emeka Ezikeugo, Diamondxtra N200,000 Onsite winner; and Adaeze Ume, Head Consumer liabilities, Access Bank during the launch of Diamondxtra Season 16 held at Alaba International Market Lagos yesterday.

The Season 16th of the special interest yielding hybrid account which allows deposit of both cash and third-party cheques has been upgraded as customers will win prizes to the value of N200 million and three SUVs, amongs other mouthwatering prizes.

Speaking at the unveiling in Alaba International Market, Lagos, Mr Bolarinwa Animashaun, regional sales director, Lagos, said the new season will bring more goodies to the customers as the bank has taken their interest at heart.

“In the last fifteen years, we have been able to ensure customer loyalty, reward committed customers over time and show that we are a bank that is ready to empower people and partner with people.

“If I take it into specific figures, we have rewarded 26,696 customers and we’ve given a total sum of N6.5 billion over the period.

This Season16is interesting, because, we have seen a lot of opportunities to expand into digital opportunities and this time around, we will be rewarding 15,786 customers, and 10,000 of them will be digitally rewarded.

“This is almost half of what we have done over the last 15 years. So that is what is making it special. We have takenit into the possibilities of how technology can expand our business and reward customers”.

The draws for the new season are going to be the same like the previous ones as it will be held in different regions.

“So, we start from the monthly draws, quarterly draws and the annual draws. What makes it extremely interesting this year is that we will be rewarding with up to N200 million in prizes and we have added some very interesting gifts. We will be given out three SUVs as part of the N200 million price for this year”, Animashaun added.

At the unveiling, Access Bank conducted onsite draws where 48 customers who have DiamondXtra accounts and were present at the unveiling won cash prizes ranging from N20,000 to N200,000.

Breakdown shows 40 customers won N20,000 each, five customers won N50,000, two customers won N100,000, while one customer went home with N200,000.

Among winners of the N20,000 prize was Mr Victor Edobor, who said he opened the DiamondXtra accounts 24-hours before the draws.

One of the two winners of the N100,000 prize, Mrs. Maureen Nneka Oforka, said she was surprised to have won at the well-attended event as that was her first time winning any prize.

She said, “I have never won any prize in my life. This is my first. I came here reluctantly and thank God, I am here and I am a winner of N100,000 which has already been paid into my account.

The grand prize winner of N200,000, Mr. Emeka Ezikeugo, a trader in Alaba, said. “I will forever be grateful to Access Bank for the prize as I was not expecting it. I thank the bank for showing leadership among its peers”.

To be part of the winning train and qualify for the DiamondXtra season 16 which is open to both new and existing customers, new customers are required to open a DiamondXtra savings account with just N5,000 by dialling *901*5# or walking into one of our branches to open the account.

However, the more multiples of N5,000 both new and old customers save, the higher their chances of winning at the monthly, quarterly and annual draws.

DiamondXtra is an interest yielding hybrid account which allows deposit of both cash and third party cheques. Hybrid means a combination of both savings and current account features. The DiamondXtra reward scheme has given away over N6.5 billion in cash and household items to over 15,000 loyal customers over the last 15years.  Please click HERE to learn more.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Lafarge Africa Launches Girls-in-Tech Programme to Empower Women Innovators

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Recognising the underrepresentation of women in the technology sector, Lafarge Africa Plc, has launched the Girls in Tech Program, a pioneering initiative aimed at empowering young women in technology.

Meticulously crafted to bridge the gender gap in tech and empower 10 young females between the ages of 18-25 years from Lafarge Africa Host communities in Cross River State, the program is poised to make a significant impact in the region.

The Girls in Tech Program seeks to harness the unique talents of these young women and introduce them to the dynamic world of technology. By providing them with essential skills and opportunities, the initiative aspires to equip them to become self-reliant as well as problem solvers in society.

In collaboration with Aptech and Arena Multimedia,globally recognized leaders in technology incubation and opportunity, as well as The Bridge Leadership Foundation, the boot camp promises to be a transformative experience for the participating girls, who are eager to make their mark in the tech industry.

Speaking during the onboarding to flag-off in Calabar recently, the Plant Manager, Lafarge Africa Plc, Sotirios Valsamakis, who was represented by the Human Resources Business Partner, Lafarge Africa Plc; Barong Ita, revealed that the program was in line with the company’s commitment to diversity and inclusion.

She also added that the initiative is designed to ignite a spark of inspiration, hope, and possibilities in the heart of the selected girls across the host communities.

“As an organization, people are an integral part of our sustainability drive, and we are invested in building lasting progress by empowering members of our host communities. We also recognize the need for greater and greener diversity and inclusivity within the tech sector.”

Today’s event is not just about launching a program. It is about igniting a spark of inspiration, hope, and possibilities in the hearts of these young women. It is about challenging stereotypes.”

Also speaking at the event, the Cross Rivers State Commissioner for Science, Innovation & Technology, Justin Beshel represented by Edwin Adie, Technical Senior Advisor, Cross Rivers State Ministry of Science & Technology commended Lafarge Africa for the initiative adding that it is in line with the State government’s plan towards science, technology and innovation development.


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Hydrogen, CCHub Partner to Encourage Fintech Startup Success

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As the country faces economic challenges, the need for adaptive strategies in the fintech industry becomes paramount. In line with this, leading Fintech startup, Hydrogen Payment Services Limited (‘Hydrogen’), has teamed up with Co-creation Hub (‘CcHub’) to host an insightful event themed, ‘Adapting Fintech Business Models to Economic Climes’.

The event, set to take place on Thursday, April 18, 2024, from 12:00 WAT at the CcHub office in Sabo, Lagos, will delve deep into the intricacies of Nigeria’s economic challenges and how these influence the fintech ecosystem.

Participants will gain actionable insights on how to adapt fintech business models to volatile economic conditions by prioritising flexibility, agility, and customer-centricity.

This collaboration underscores the shared commitment of both entities to empower aspiring founders venturing into the Fintech space amidst economic uncertainties.

By leveraging their respective expertise and resources, Hydrogen and CcHub aim to equip emerging entrepreneurs with the knowledge, tools, and support needed to thrive in today’s dynamic economic conditions.

Emeka Awagu, Chief Technology Officer at Hydrogen, commented on the strategic partnership with CcHUB: “Our alliance with CcHUB amplifies our shared commitment to pioneering transformative solutions in Nigeria’s fintech sector.

“By leveraging Hydrogen’s technological expertise alongside CcHUB’s innovative approach, we are primed to set a new standard for fintech excellence and drive impactful change across the industry.”

The event will feature a distinguished panel of industry experts and thought leaders, including, Ina Alogwu, Group Director, Digital Transformation, ARM HoldCo; Emeka Awagu, Chief Technology Officer, Hydrogen, and Miracle Ezechi, Digital Marketing Manager, Hydrogen.

The panel discussion will be moderated to encourage an engaging and insightful conversation on the strategies and innovations required to thrive in Nigeria’s Fintech landscape amidst economic challenges.


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