Global Economy –Rundown:
The United States Fed Reserve maintained its key benchmark rate at 0%- 0.25%, while policymakers held that the economy is not out of the woods of economic struggles despite splashes of rebound in economic activity, as the economy remains below the pre-pandemic levels. The recent economic trajectory remained within the cautious territory, as the committee calls for more push from the fiscal side of policy decisions. The Fed held to its inflation benchmark at its flexible averaging targets. Other encouraging economic data revealed that United State worker productivity for the third quarter recorded some glimpse of fortune, as nonfarm productivity for the quarter recorded a 4.9% annualized rate, also hourly work has rebounded at a 36.8%. However, the sustainability of the recent resurgence of the United State economy still remains clouded by the surge in the infectious rate of the pandemic.
Domestic Economy –Rundown:
The nation’s Apex Bank revealed that the sum of N1.15trn was engulfed in servicing the sovereign debt within the first half of the year, while the current debt to GDP ratio stood at 19.2%, while the nations perilous liquidity position of the government is of uttermost concern, as this stand to impede on fiscal growth objective of the government, as government rising budget deficit has been propelled by lower government revenue capacity, as its current public debt is estimated at N31.01trillion as at the first half of 2020 fiscal year. While the economic trajectory for the mono-economy is tilted towards a further crunch, given the recent publication of the United state Energy Information Administration, as it indicates that an estimated sum of $272billion Oil revenue is expected to be lost by the cartel members, whose estimated aggregate revenue for 2019 fiscal year was $595billion, it simply implies that if the anticipated revenue shock crystalizes, then the overburdened debt servicing obligation becomes a strain that requires urgent fiscal attention.
Currency:
The Naira closed flat, as the exchange rate at the I&E FX window settled at N386.00/USD, while at the parallel market, Naira depreciated in value to N464/USD.
Equities
The equities market week-on-week performance indicated a 1.74% growth, and the YTD ASI grew to 15.72%. The sector performance of the NSE indices maintained a positive rally for the week, as the average change of the NSE Indices was 0.70%, based on the indices monitored, which was sustained by significant growth recorded from NSE Industrial index.
Fixed Income:
The system liquidity at the end of the week shrunk, as both open buyback rate and overnight rates increased to 5.70% and 6.40% respectively.
T-Bills secondary market activities was dovish as the average yield remained unchanged from the previous week’s yield of 0.48% for the week.
The Bond secondary market, activities maintained its bullish sentiment, as the average yield for the week dipped by 3bps to 4.80%, as yield declines were recorded between the short-dated and long-dated maturity.
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