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FXTM Analysis: Is Market Volatility Making A Return?



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FXTM Research Analyst Lukman Otunuga comments on Asian stock movements, following rising US – China tensions over North Korea.

Asian stocks concluded lower on Tuesday while European equities were under pressure as geopolitical tensions stemming from North Korea’s missile launch have encouraged investors to develop a more cautious stance.

It appears that geopolitical risks are starting to reappear in the headlines, something that has been complemented by reports that President Trump believes China should be doing more to contain the situation.

With the unexpected surprises from last week sparking discussions of volatility making a return, the developments seen today could fuel the speculation further. The re-emergence of geopolitical tensions in Asia, Brexit developments and ongoing political instability in Washington could make for wild trading conditions in the third quarter of 2017.

Yen supported by caution
The Japanese Yen appreciated against its major counterparts during early trading on Tuesday amid risk aversion, with investors adopting a cautious approach following reports of North Korea conducting a long-range missile test. In times of uncertainty and trouble, the Yen remains a trader’s best friend and this was illustrated today when the currency gained ground against the US Dollar.

Although the USDJPY eventually clawed back recent losses as of writing, further downside could be expected if uncertainty and geopolitical risk accelerate the flight to safety. From a technical standpoint, the USDJPY has found some resistance at 113.50. A failure of bulls to secure control above this level could open a path lower back towards 111.60.

WTI Crude smashes into $47
WTI bulls crashed into a brick wall in the form of $47 on Tuesday, following reports that OPEC’s production in June climbed to its highest levels so far in 2017, as Nigeria and Libya pumped more oil.

It’s quite remarkable how the seemingly harmless supply cut exemptions for Libya and Nigeria are threatening to sabotage the efforts made by the rest of the group to rebalance the saturated markets.

With rising oil production in the US another painful piece of the equation that continues to compound to the oversupply concerns, WTI Crude is at risk of remaining depressed for a prolonged period of time. Although WTI Crude has staged an impressive rebound from the $42 level, sellers may be enticed to exploit the technical bounce to install renewed rounds of selling, with $45 acting as a level of interest. From a technical standpoint, the $47-48 region should act as a check point for bears to jump back in.

Commodity spotlight – Gold
Gold bulls found support in the form of geopolitical risk during Tuesday’s trading session as the metal rebounded from $1220. Although the current market anxiety and flight to safety has the ability to support Gold, the sharp $23 depreciation observed on Monday will be difficult for bulls to claw back.

Short term bears remain in control with Gold at risk of depreciating further if the Greenback continues to stabilize. From a technical standpoint, the yellow metal has turned bearish on the daily charts. Weakness below $1220 may open a path towards $1214.















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Vodacom Director Urges Accountants to Leverage Sage/ACCA Partnership



By peter oluka

Mr Oluseyi Olanrewaju, the finance director at Vodacom Business Africa (Nigeria) Limited, has re-emphasised the need for accounting professionals to embrace digital culture.

He made the remark while delivering keynote address at Sage-ACCA Continuing Professional Development (CPA), event held in Lagos Tuesday, which was the launch of partnership between the two entities to provide platform for accountants to embrace digital transformations.

Olanrewaju emphasized that rapid growth and development in information technology has brought about digital revolution in economic, social and cultural fields, and bequeaths today’s accountant with the responsibility to improve on the skills to remain relevant.

With the recognition of the accounting discipline as an information system, he said, the accountants can’t undermine the influence that the changes in processes of carrying out transactions with the usage of IT in business operations.

In a bid to keep up with changing conditions and the enabling inclusion of information era the need to embrace the digital culture in accountancy can’t be overlooked especially in medium to large scale business.

“Technology should not be viewed as a threat rather tools to boost accounting profession. Digitization is the future; as accountants we can’t run from it. Yes, manual processes are ridden with high risks on accounting and costly. Thus, changes is the environment necessitates changes in applicable accounting tools and skills required to carry out accounting roles”, Olanrewaju said.

Determinants of business that qualify as medium to large include: IT staff & skills including several specialists, multiple locations, large capex in relation to other businesses in operation in the same industry and business with main considerations for technology purchases being advanced features and security.

Using the acronym: VUCA- Volatile, Uncertain, Complex and Ambiguous situations, he reminded the participants that, roles of accountants have changed overtime, demanding for real-time ‘results’. “The environment demands you react quickly to ongoing changes that are unpredictable; it requires you to take action. Therefore, there is little you can achieve today in the ‘VUCA’ world without digitization”.

The keynote speaker also applauded Sage X3 offering, such as robust accounting processes; consistency; time saving; delivers visible metrics; helps to improve operational efficiency and assists users to be in line with government regulations and international accounting rules.

Participants at the interactive session with other C-level ACCA members also learnt how Sage X3 offers the bedrock of the adjustments required in today’s accounting field.

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CBN 14% Interest Rate: Investors Still Expecting Cut



Lukman Otunuga, a research analyst at FXTM.

By peter oluka

Nigeria’s central bank has yet again left benchmark interest rates unchanged at 14% in November amid a ‘fragile’ economic recovery.

But, Lukman Otunuta research analyst ForexTimes, in his comment, believes investors are still keen on interest rate cut.

The apex bank also left the cash reserve ratio (CRR) at 22.5 percent.

CBN governor, Godwin Emefiele made this known on Tuesday while announcing the decision of the committee in Abuja.

Emefiele said only one of the nine members of the committee voted against the decision.

“Inflation in particular requires very close monitoring to gain clarity on the medium-term optimum path of monetary policy,” Emefiele told a news conference.

The monetary Policy Committee had begun its last meeting for the year on Monday.

According to the committee, the interest rate was held to prevent exchange rate pressure.

Commenting on the decision by the apex bank, Otunuga said, “With GDP growth in the third quarter rising by 1.40%, it seems that the central bank is hesitant to take action anytime soon.

“I believe that Nigeria’s improving economic landscape, and signs of inflationary pressures easing, are likely to support investor expectations of a rate cut.

“With inflation in Nigeria at 15.91%, there is a suspicion that the CBN may be waiting for a more sustained decline before moving ahead with rate cuts to support economic growth.

“As the year slowly comes to an end, investors will continue to observe Nigeria’s hard economic data and inflation figures for hints as to when the CBN might act in 2018”.

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Bitcoin Smashes Through $8,000 for the First time



Bitcoin hit a new record high on Monday after smashing through the $8,000 level for the first time over the weekend, marking an almost 50 percent climb in just eight days.

The new high came after leading U.S. payments company Square Inc said late last week that it had started allowing select customers to buy and sell bitcoins on its Cash app.

Bitcoin traded as high as $8,197.81 on the Luxembourg-based Bitstamp exchange, up over 2 percent on the day and around 48 percent up since dipping to $5,555 on Nov. 12.

An eye-watering eightfold increase in the value of the volatile cryptocurrency since the start of the year has led to muliple warnings that the market is in a bubble, and institutional investors are broadly staying away.

Retail investors, however, as well as some hedge funds and family offices, are piling into the market. The “market cap” of all cryptocurrencies hit an all-time high of over $242 billion on Monday, according to trade website Coinmarketcap.

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