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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

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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