Taiwo Adekeye, FMVA
February 9, 2024
Oil prices increased by over 3% on Thursday amid fears of an escalating conflict in the Middle East, prompted by Israel’s rejection of a ceasefire proposal from Hamas. After Benjamin Netanyahu, the Isreal prime minister rejected a peace proposal to end the war in the Palestinian enclave, Israeli forces bombed the southern border city of Rafah on Thursday. Brent futures was up by 3% closing at $81.36 a barrel while the U.S. West Texas Intermediate crude surged by 3.2% to close at $76.22.
South Africa: The Rand declines ahead of presidential speech.
South Africa’s Rand declined on Thursday in anticipation of President Cyril Ramaphosa’s annual address to the parliament. Potential investors and nationals will be looking ahead to Ramaphosa’s State of the Nation Address for any solutions he might propose to the nation’s power shortages and logistics crisis. The Rand traded at 18.9700 against a broadly stronger USD, 0.42% lower compared with its previous close. The USD was last up 0.26% against a basket of global currencies while South Africa’s benchmark 2030 government bond slumped, with the yield up 3 basis points at 9.915%
Egypt: inflation decelerates beyond expectations in January
Egypt’s annual urban consumer price inflation dropped to 29.8% in January from 33.7% in December. Month-on-month, prices increase by 1.6% in January, up from 1.4% recorded in December while food prices was up by 1.4%, down from 2.1% in December. Egypt’s inflation rate has been declining from an historic high of 38.0% in September. Core inflation, which excludes fuel and some volatile food items, declined to 29.0% in January from 34.2% in December.
Uganda: Uganda’s central bank secures $339 million in an uncommon private placement debt auction.
Uganda’s central bank raised 1.3 trillion shillings ($339 million) in an uncommon private placement Treasury bond auction this week, against a target of 1.5 trillion shillings. It is the custom of the bank to conducts monthly open auctions to sell government bonds. However, in 2020, it began private placements for certain bonds, selectively inviting specific banks to participate rather than relying on the traditional open auctions. This week’s auction constitutes three-year, five-year, 10-year, 15-year and 20-year Treasury bonds were on offer and the central bank received bids that amounts to 2.3 trillion shillings.
Russia: Russia GDP surges due to increase military spending amid economic challenges
Russia’s economy retreated sharply from a slump in 2022, the growth was sustained heavily on state-funded arms and ammunition production and masks problems that are hampering an improvement in Russians’ living standards. The economy is developing and has a sufficient safety margin enabling Russia to successfully transition away from the West amid sanctions imposed over the Ukraine war. Statistics service Rosstat’s GDP growth assessment on Wednesday showed a 3.6% rebound from a revised 1.2% drop in 2022
China: China’s consumer prices drops substantially since 2009 amid deflating economy
China’s consumer prices decline sharply in more than 14 years in January while producer prices also dropped, intensifying pressure on policymakers to do more to revive an economy low on confidence and facing deflationary risks. The consumer price index (CPI) fell 0.8% in January from a year earlier, after a 0.3% drop in December while the CPI rose 0.3% month-on-month from a 0.1% uptick the previous month. The annual CPI decline in January was the biggest since September 2009 mainly led by a sharp drop in food prices.