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FXTM Analysis: Brexit Bill Strikes Again

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FXTM Research Analyst Lukman Otunuga comments on the Sterling ahead of official Brexit negotiations, and today’s Federal Reserve meeting.

Sterling was unsettled during Wednesday’s trading session with prices violently swinging between losses and gains after reports of Brussels bolstering the Brexit bill to up to $100 billion, which reinforced speculations of the EU playing hardball.

Official negotiations of the UK leaving the European Union have yet to begin, but financial heavyweights have already started their battle of words on the Brexit topic.

With Theresa May vowing on Tuesday that she will be a “bloody difficult woman” in Brexit talks adding to anxiety, a rocky road filled with obstacles may lie ahead.  Sterling could find itself exposed to downside shocks amid the uncertainty, with recent reports of the European Union warning that May could be barred from the negotiations terms, fueling hard Brexit fears.

Focusing on the macro fundamentals, UK construction PMI accelerated in April to 53.1, but this did little to inspire Sterling bulls with prices eventually descending back towards 1.2900.

The growing uncertainty around Brexit negotiations, coupled with political instability ahead of the UK general election could create a scenario where markets slightly overlook fundamentals with much of the focus directed towards ongoing Brexit developments.

From a technical standpoint, the GBPUSD could come under renewed selling pressure if bears are able to break below 1.2875. A breakdown below 1.2875 may encourage a further decline towards 1.2775. In an alternative scenario, an intraday breakout above 1.2940 could pave the way to 1.3000.

Fed meeting and ADP in focus
The main event on Wednesday that could rattle financial markets is the Federal Reserve meeting which is widely expected to conclude with interest rates left unchanged. With economic data from the US mostly mixed since the previous Fed meeting and first quarter growth in 2017 cooling at 0.7%, investors may heavily scrutinize the statement to see if there is a change in rhetoric.

The Dollar could be at risk of depreciating further if “doves” exploit the softening economic outlook to make a guest appearance today.

On the other hand, if the Federal Reserve maintains its hawkish bias and offers clarity on US rate hike timing, Dollar bulls could be given enough confidence to challenge 99.50.

Some attention may also be directed towards the pending ADP Nonfarm data, which could be treated with some skepticism after it reported a mammoth gain in March jobs, while NFP tumbled well below expectations under 100,000.

Euro searches for direction
The Euro has been on cruise control this week with investors observing the currency from a distance ahead of the second round of the French Presidential election voting on 7 May. With the current polls showing that Emmanuel Macron is holding a solid 20 point lead over Marine Le Pen, markets may have already priced in a Macron victory.

Although the Macron outcome on Sunday has the ability to elevate the Euro higher, an unexpected Marine Le Pen victory could still rattle the financial markets with parity on the EURUSD becoming a possibility. From a technical standpoint, a failure for bulls to secure control above 1.0900 may open a path towards 1.0800.

WTI Crude dips below $48
WTI Crude was exposed to heavy losses this week as anxiety over the rising output in Libya and Canada, coupled with concerns of a dip in compliance with OPEC’s production cuts enticed sellers to attack.

It is becoming increasingly clear that oil prices remain gripped by the oversupply fears with confidence rapidly diminishing over OPEC’s ability to stabilize the saturated oil markets. Although some still remain cautiously optimistic that an extension of the production cut deal may limit the global glut, the incessant pumping of US Shale has left most investors skeptical, questioning whether prices will ever balance out.

Much attention may be directed towards the pending crude oil inventory report which may pressure oil markets further if there is a build in US crude inventories. From a technical standpoint, WTI Crude is heavily bearish on the daily charts and a breakdown below $47.50 could open a path towards $44.00.

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E-Financial

Customers to Sue Banks over Stamp Duty Collections

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Stakeholders have called on the Central Bank of Nigeria (CBN) to withdraw its circular mandating banks to collect stamp duties from customers’ bank accounts, stressing that such directive and practice is unconstitutional, according to the Tribune.

According to them, if the practice of deducting stamp duties from customers’ bank accounts is not suspended, it is expected that other stakeholders would challenge the banks in court, on a case by case basis.

Thus, the impending legal suits that would emanate as a result are likely to disrupt the activities of banks and result to additional legal costs, they warned.

Stakeholders at various occasions have also charged deposit money banks to suspend the practice of collecting stamp duties on receipts for deposits and transfers by customers.

The Stamp Duties Act (SDA), Chapter S8, Laws of the Federation of Nigeria (LFN) 2004 (SDA) provides the legal basis for the imposition and collection of stamp duties in Nigeria.

A tax audit and financial advisory services firm, Deloitte, in a document titled: “Stamp Duties on Bank Deposits and Transfers: Are There Unresolved Issues?” and obtained by Tribune stated that, stamp duties are chargeable on all instruments relating to matters executed between a company and individual, group or body of individuals and those executed between persons or individuals. The instruments the firm noted, upon which stamp duties are chargeable include bond, bill of exchange, promissory note, covenant, conveyance on sale, lease, mortgage, among others.

This general rule according to the tax experts did not include receipts for transfer to self, transfers from savings accounts and receipts in respect of salaries and wages, yet, further to a statement issued by CBN on 21 January 2016 banks have continued to deduct these duties.

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UBA Disrupts the Market, Delights Customers with Callback Technology

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It would appear that the United Bank for Africa Plc has carved a niche for itself and gone way above its peers with its deployment of Al-powered Callback Technology.

The Al-Powered Callback Technology is one that enables the bank to call back customers instantly when they contact the bank for one reason or the other.

The UBA Group seems to have taken advantage of this high-powered system that even western banks are yet to fully implement as it has gone beyond the legacy banking systems, to omni channel marketing and social media lead generation.

This largely involves meeting its customers where they are – on websites, email, social networks, and cross-device platforms.

It is interesting to note that customers calling the bank for various reasons now have the option of requesting a call back to get on demand information. This has been implemented by using web to phone callback technology developed by Lucep.

Basically, the way it works is that customers can see the website widget deployed on the bank’s website for several financial services and products, wherein they can enter in their name and number, and select the reason for which they want a call back.

Thereafter, the Lucep AI takes the callback request, and distributes it to the right team, ensuring it goes to an authorized member of the team who has the app on their smartphone. This member can then connect back to the customer through the app itself.

Such instant response systems have huge benefits especially when it’s about following up on new customers who are inquiring about banking services.

If for example, a potential client is searching for the best mortgage rates and calls several banks including UBA.

UBA being the only bank that has implemented this Al -powered technology with an instant lead response system, is able to give the customer a call-back within one or two minutes.

This activity will naturally give the bank an edge over its competition as it will probably be the first to reach the customer back. The bank is therefore able to engage customers and offer their services faster than any other bank.

It is this kind of attention to detail, personalized service, and deft use of the latest technologies that has helped UBA stay ahead of its competitors in Africa, and ahead of the trends in the global banking industry.

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Five ‘Must’ Know Before Putting Your Money in Bitcoin

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Bitcoin is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Bitcoin is now worth $4,317.

Due to this, many are encouraging others to invest in the cryptocurrency. Nigerians are slowly embracing Bitcoin.

In line with this, Jumia Travel, the leading online travel agency share things Nigerians must know before joining the Bitcoin train.

More People Are Using Bitcoin
Despite the fact that some Nigerians are struggling to accept Bitcoin, more people are embracing it after years of gradual growth.
Hence, whether we like it or not, Bitcoin is the future and we have no choice than to use it.

Retailers And Vendors Are Accepting Bitcoin
You can now pay for whatever you purchase online with Bitcoin as some retailers have made it possible to settle transactions with it. Some notable companies that accept Bitcoin include Expedia, Microsoft, Subway, Newegg, TigerDirect, Tesla and PayPal. So, do not be surprised when some Nigerian companies start to accept Bitcoin.

Bitcoin Transfers Are Fast And flexible
While many financial institutions charge you or take days to process transactions, Bitcoin allows transfers from one account to another almost for free. Of course, you must already have your money in Bitcoin form. There is no need for any middlemen. As a result, the transfer is seamless.

Extremely Volatile
Bitcoin is still growing like earlier mentioned and there are a number of market factors that influence it. It very dependent on the rules of demand and supply.
The more people are willing to buy Bitcoins, the more the Bitcoin value will increase. Conversely, if more people sell, the prices will decline.

Treat It As Speculating, Not An Investment
Cryptocurrencies have a bright future as a new way to conduct commerce and business. That is not the same thing as saying that their value right now is sustainable. It’s early days yet, and, while the number of businesses accepting cryptocurrencies are growing, it’s not big enough for most of the demand to be built on legitimate trade.
This means that buying cryptocurrencies is speculation, not investment. Hence, you should be willing to lose the money you invest in buying Bitcoin!

 

 

 

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