Akintunde Oyedokun
Research Analyst
Oil prices dipped on Monday, ending a five-day rally, as weak economic data from the U.S. and Germany countered support from a weaker dollar and winter energy demand forecasts. Brent crude fell 0.3% to $76.30 a barrel, while WTI dropped 0.5% to $73.56. Despite the declines, both benchmarks remained in overbought territory.
Earlier gains were driven by a U.S. winter storm and expectations of Chinese stimulus, but slowing demand growth and rising supply could pressure prices further in 2025, analysts warned.
Germany’s Inflation Exceeds Forecasts In December, Driven By Food Prices
Germany’s inflation climbed to 2.9% in December, surpassing the 2.6% forecast and up from November’s 2.4%, as food prices rose and energy price declines slowed. Core inflation rose to 3.1%, with services inflation increasing to 4.1%.
Economists warn inflation will remain elevated in early 2025, fueled by rising costs for CO2 emissions and insurance. ING’s Carsten Brzeski highlighted renewed stagflation fears for the ECB, which anticipates inflation returning to its 2% target by 2025.
Energy prices dropped 1.7% year-on-year, while food prices rose 2%. The data comes ahead of the eurozone inflation report and the ECB’s Jan. 30 policy meeting.
Canada’s Services Sector Slips into Contraction, As Strikes, Weak Demand Persist
Canada’s services sector saw its first contraction in three months, with the Services PMI falling to 48.2 in December from 51.2 in November, according to S&P Global. Activity was hindered by a month-long postal strike and cautious client spending as the year ended.
New business dropped sharply to 46.4, while export orders hit their lowest level since December 2020 at 39.7. Excess capacity left firms able to handle workloads with ease, pushing the outstanding business index to a four-year low of 44.6.
In contrast, manufacturing activity rose to a 22-month high of 52.2, aided by U.S. clients building inventories ahead of potential trade tariffs.
Kenya’s Private Sector Growth Slows Slightly In December
Kenya’s private sector activity expanded modestly in December, with growth easing slightly from November but remaining supported by higher customer sales, according to a survey released on Monday. The Stanbic Bank Kenya Purchasing Managers’ Index (PMI) edged down to 50.6 from 50.9, staying above the 50.0 mark that indicates economic expansion.
Stanbic Bank economist Christopher Legilisho noted that this is the first quarter of output growth since late 2021. “The private sector is showing signs of recovery, with new orders and employment levels also improving,” he said.
The country’s economy recorded a growth of 5.6% in 2023, with projections for 5.2% in 2024 and 5.4% in 2025, according to the finance ministry.
Nigeria’s Non-Oil Exports Surge By 19.23% To $0.62 bn In September 2024
The Central Bank of Nigeria (CBN) reports a 19.23% increase in non-oil exports, reaching $0.62 billion in September 2024, up from $0.52 billion in August. This growth is attributed to higher earnings from agricultural exports, led by cocoa beans and urea. Brazil remains the top destination, accounting for 20.22% of total exports. The surge in exports is also driven by top exporters like Indorama Eleme and Dangote Fertilizer. The broader trend reflects Nigeria’s successful push to diversify away from oil dependence.
