Akintunde Oyedokun
Research Analyst
Oil prices fell more than 1% on Wednesday as a stronger dollar and sharp increases in U.S. fuel inventories outweighed supply cuts from OPEC and Russia. Brent crude settled at $76.23 per barrel, while WTI crude closed at $73.32, reversing earlier gains.
Significant increases in gasoline and distillate stockpiles added pressure to the market, with analysts projecting Brent crude to average $76 per barrel in 2025, down from $80 in 2024.
Australian Inflation Rises Slightly, Core Inflation Drops, Rate Cut Likely
Australia’s inflation edged up in November, primarily due to a 22% rise in electricity costs, but core inflation fell to 3.2%, signaling easing price pressures. This shift increases expectations for a possible interest rate cut in February, with swaps showing a 64% chance.
The Australian dollar declined by 0.34%, while bond futures rose. The labour market remained strong, with job vacancies rebounding after nine quarters of decline. Treasurer Jim Chalmers expressed confidence in the progress on inflation as the RBA assesses its next steps.
China Expands Trade-In Scheme To Boost Consumer Spending
China has expanded its consumer trade-in program, adding home appliances like microwaves, water purifiers, and dishwashers, while offering 15% subsidies on digital products like phones and tablets under 6,000 yuan. The government allocated 81 billion yuan ($11.05 billion) for these incentives in 2025. The move is part of broader efforts to stimulate the sluggish economy, with plans to increase subsidies to 300 billion yuan this year. Despite previous successes in driving sales, investor reactions were subdued as stocks fell.
Egypt’s December Inflation May Drop To 24.2%
Egypt’s inflation is projected to ease to 24.2% in December, down from 25.5% in November, driven by a cooling of food prices, particularly vegetables and fruits. Analysts attribute this slowdown to seasonal price adjustments and ongoing economic reforms. Inflation had spiked to 38% in September 2023, but the recent decline follows efforts under an $8 billion IMF support package aimed at narrowing the budget deficit and stabilizing the economy. However, inflationary pressures persist due to rising domestic prices, especially following subsidy cuts. Official inflation figures are expected to be released by the government on Thursday.
Tax Reform Bills Delay 2024 Budget, Senate Assures On 2025 Deadline
Senator Solomon Adeola, Chairman of the Senate Committee on Appropriation, revealed that the tax reform bills introduced by President Bola Tinubu disrupted the National Assembly’s January-to-December budget cycle. He acknowledged that extensive deliberations on the reforms delayed the 2024 budget process but assured the public that the 2025 appropriation bill would be passed by January 31, 2025. Adeola emphasized that despite the delays, the legislature remains committed to fiscal discipline and economic growth. Additionally, the National Assembly approved an extension for the 2024 budget to June 2025.
