General News
Will Trump Shock the World Again?
By Lukman Otunuga, Senior Research Analyst at FXTM,
Nearly four years ago, Donald Trump shocked the world by winning the US presidential election, pulling off one of the biggest political upsets in American history.
With polling stations opening in a few hours’ time, the lingering question is whether history will repeat itself with Trump catching markets off-guard once again and securing a decisive electoral college win. National polls favour Democrat candidate Joe Biden to defeat the incumbent, a development that is mysteriously similar to 2016. Whatever the outcome of this momentous day, it will certainly have a profound impact on financial markets.
US futures and Asian stocks have marched into Tuesday with a spring in their step as encouraging factory activity data and expectations of a ‘blue wave’ victory for Democrat candidate Joe Biden have boosted risk sentiment. A clear Biden win, where his party retains control of the House and wins the Senate, seems like the most positive outcome for markets. Such a result will open the doors to a round of large-scale fiscal stimulus that could nurse some of the damage COVID-19 has inflicted on the US economy. Should Biden win with Republicans retaining the Senate, this may reduce the odds of a larger fiscal stimulus and could be less positive for global risk sentiment.
A Trump victory will certainly catch markets by surprise and prove the polls wrong again. Although this outcome may result in a smaller or even delayed fiscal package, the policy continuity from his re-election could send stock prices higher over the medium term.
In the event of a contested result, risk aversion is likely to sweep across global markets which would trigger a stock market selloff, while boosting appetite for the safe-haven Dollar, Yen and Gold.
Dollar outlook hangs on election outcome
King Dollar’s performance over the next few days will be heavily influenced by the election outcome. As results start flowing in later this morning, the Dollar is poised to remain highly sensitive and volatile as investors attempt to figure out who the next President of the United States will be. A ‘blue wave’ outcome may be negative for the Greenback due to an even bigger stimulus package by Democrats lifting inflationary pressures. On the other hand, a contested result might inject bulls with fresh inspiration to push the DXY beyond the 94.00 resistance level, given the Dollar’s safe-haven status.
Talking technicals, a solid daily close above the 94.00 level could open a path towards 94.65 and beyond. Alternatively, a clear Biden sweep should see the Dollar weaken and trigger a decline back towards 92.70.
Commodity spotlight – Gold
Over the past few weeks, Gold has been waiting for a fresh directional catalyst to break out of its current range. This could come in the form of the US election today.
A Democrat sweep is likely to provide Gold a handsome tailwind in the form of a weaker Dollar. Although the metal may also derive some strength from a Trump win, the upside is likely to be limited by other forces in the short to medium term. As new coronavirus cases surge in Europe and the United States, investors are rushing towards the world most liquid currency. If the Dollar ends up appreciating on a contested election outcome, this could limit Gold’s upside despite the risk aversion.
Looking at the technical picture, Gold is hovering around $1890 as of writing. The key levels of interest remain $1935 and $1965 to the upside and $1858 support if prices go lower.
Federal government has temporarily suspended the controversial annual dues imposed on public interest enterprises by the Financial Reporting Council (FRC) after fierce opposition from businesses.
Jumoke Oduwole, minister, Industry, Trade, and Investment, announced the decision during a Ministerial Consultative Meeting in Abuja on Wednesday.
The move follows mounting pressure from private sector groups, including the Nigeria Employers’ Consultative Association (NECA) and the Manufacturers Association of Nigeria (MAN), who slammed the Financial Reporting Council (Amendment) Act 2023 for burdening companies with excessive fees.
The Act mandates cumulative annual charges for non-listed entities and imposes a harsh 10% monthly penalty on unpaid dues, compounding until full payment, a provision that sparked widespread backlash.
At the meeting, major industry players like NECA, MAN, the Nigerian Association of Chambers of Commerce (NACCIMA), oil producers, and telecom operators warned that the fees would cripple businesses already struggling in a tough economy.
Oduwole clarified the suspension, stating, “The government has decided to direct the Financial Reporting Council to pause in the implementation of the new annual dues. You know that I am a lawyer, and a suspension request by the organised private sector would be in contravention of legislation duly passed by the National Assembly. A pause is an administrative process simply to review, in line with what we discussed today.”
She assured stakeholders that the halt would last no longer than 60 days, with a technical working group—including FRC officials and private sector representatives—set up to reassess the policy.
“We are a listening administration. The private sector has requested a range from three months to an indefinite suspension. We are not going to do that. So, at the most, 60 days is in my estimate. We are going to set up a technical working group comprised of the FRC and the organised private sector who have formally written in, and this will be reviewed,” Oduwole emphasized.
The Standards Organisation of Nigeria (SON) says it is intensifying efforts to standardise locally manufactured products, including Made-in-Aba brands, in order to enhance both local and international acceptance.
Aharanwa Chuks, Director of Region (South East), SON, communicated this in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja.
Chuks said through the Mandatory Conformity Assessment Programme (MANCAP), SON ensured that all Nigerian-made products conformed to the relevant Nigerian Industrial Standards (NIS).
According to him, MANCAP involves direct engagement with manufacturers to certify that their products meet established quality benchmarks.
“This process includes inspecting production facilities, sampling products and testing them against NIS requirements.
“Successful compliance results in the issuance of the MANCAP certification, signifying adherence to quality standards.
“In Aba, SON has been proactive in educating manufacturers about standardization.’’
The director said SON also conducted stakeholder interactions; gathering manufacturers from various sectors to provide guidance on producing goods that met both local and international standards.
“For instance, leather manufacturers in Aba have been sensitized on standardization practices to enhance the global competitiveness of their products.
“Manufacturers are encouraged to collaborate with SON to obtain MANCAP certification, ensuring their products are not only marketable within Nigeria but also competitive internationally.
“This initiative aims to boost consumer confidence and promote the acceptance of Made-in-Aba products globally,” Chuks said.
Operatives of the Economic and Financial Crimes Commission (EFCC), has busted a Ponzi Scheme Academy and arrested 133 suspects in Abuja.
They were arrested at the Compensation Layout in Gwagwalada area of the Federal Capital Territory, FCT, Abuja, following actionable intelligence on the existence of the Academy.
The Academy, named Q University (a.k.a Q-Net) is in the business of recruiting gullible young Nigerians who are trained to recruit more gullible citizens into the scheme with the promise of getting unrealistic profit returns.
The suspects are enrolled into a training codenamed: “Special Training for New Generation Billionaire” and brainwashed to believe that they would graduate into the league of billionaires.
They got into the training by obtaining a form the promoters called “Independent Representative Application Form” with promotional slogans such as: “I’m a Champion” “I’m Unstoppable”, “I’m Infinity”, among others.
The EFCC carried out the operation in collaboration with officers and men of 176 Guards Battalion, Nigerian Army.
Items recovered from the suspects include phones, computers and other electronic gadgets.
They will be charged to court as soon as investigations are concluded.
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