Global Market Update: Oil Gains Over 2%, Yet Marks Seventh Consecutive Weekly Decline

Taiwo Adekeye, FMVA
December 11, 2023
Oil prices increased by more than 2% as U.S. data confirmed forecasts of rising demand. However, due to persistent oversupply fears, both benchmarks declined for the seventh week in a row, the highest weekly drops in five years. Both indexes dropped 3.8% for the week after falling to their lowest point since late June on Thursday, an indication that many traders think the market is overpriced. U.S. West Texas Intermediate oil futures was up by $1.89 closing at $71.23, while Brent crude futures settled rose by $1.79 settling at $75.84 a barrel.
Nigeria: Moody’s raises its rating for Nigeria to positive.
The ratings agency Moody’s updated its assessment of Nigeria on Friday from stable to positive, noting potential improvement in the nation’s external and fiscal positions as a result of reform initiatives by the government. The government eliminated exchange restrictions, lifted a prohibition on some imports, and eliminated a popular but expensive gasoline subsidy in May, marking the most radical reforms the nation has seen in decades. A fiscal and external improvement in the nation’s credit profile is likely as a result of these policy adjustments and maybe future ones.
Egypt: Egypt’s Headline Inflation drops to 34.6% in November
Egypt’s annual urban consumer price inflation decreased to 34.6% in November from 35.8% in October due to a reduction in the rate of growth in food prices. After two years of rising rates, annual inflation reached a record high of 38.0% in September. The November figure was the lowest since May. October’s 38.1% core inflation rate dropped to 35.9% in November, excluding gasoline and a few volatile food items.
Ethiopia: Ethiopia inching towards default as discussions with bondholders’ fails
Negotiations with the principal holders of Ethiopia’s $1 billion foreign bond broke down without a deal, the African nation seemed to be on the verge of defaulting on its debt. One of Africa’s most promising economies is now having difficulty paying off its debts due to the combined effects of the COVID epidemic and the recently concluded civil war in its northern Tigray area. The Ethiopia’s Finance ministry stated that due to acute external liquidity pressures, it has informed bondholders that it will be unable to make a $33 million bond interest payment scheduled for December 11, leading to a default.
India: India’s foreign reserves increased for the third week, surpassing a four-month high.
India’s foreign exchange reserves increased for a third week in a row reaching a record high of more than four months high of $604.04 billion, as of December 1. Prior to this, during the week ending November 24, the foreign exchange reserves increased by $2.54 billion to $597.94 billion. The IMF’s reserve position grew by $5 million to $4.85 billion. Additionally, despite higher US Treasury rates and a stronger US dollar, the Indian rupee has shown less volatility in Yr23 as compared to peers in emerging markets.
Russia: Inflation surges, signaling rate hike
Russia’s inflation gained momentum in November, confirming predictions that the central bank will raise interest rates when it convenes for its final meeting of the year on December 15. The annual rate of inflation increased from 6.69% in October to 7.48% in November. A weak rouble, a tight labor market, and robust consumer demand have all contributed to the central bank’s rate increases of 750 basis points since July, including an unexpected emergency boost in August. However, President Vladimir Putin, who announced on Friday that he will seek the presidency again in 2024, is confronted with a number of severe economic issues, including high interest rates.
China: China suggests cutting mutual fund trading costs in order to control charges.
China’s securities regulator has released proposed guidelines intended to reduce trading charges for mutual funds and resolve the conflict of interest between the securities trading and fund sales operations of brokerages, the most recent reform to the $3.8 trillion mutual fund sector. The measures, according to the China Securities Regulatory Commission, were made to better safeguard investors and control how fund managers distribute trading commissions. In addition, Fund managers ought to select brokerages that are financially sound, well-behaved, and have strong capabilities in trading and research since the proposed regulations would prohibit mutual fund companies from paying any brokerage more than 15% of their total trading commissions.