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U.S Unemployment Claims Drop to 41 Year Low

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The number of new applicants filing for unemployment benefits in the U.S dropped to 255,000 beating the projected 279,000 by economists. The figure came out 281,000 for the previous week ended July 16 and surprisingly dropped 26,000 to 255,000 last week. This is the lowest since 1973, said Labour Department on Thursday.

The historic decline was attributed to the fact that employers are retaining workers to cater to a pickup in demand following a slump in early 2015. This combined with steady hiring across various states has improved household spending, an important part of the economy.

According to Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, companies are holding on to employees not merely because of current demand but also for growth, although unemployment claims are better calculated by using the monthly average for more realistic values over a long period and in order to limit excessive volatility that could damp result.

UK Retail Sales

The Uk retail sales fell by 0.2 percent in June, the report from the Office for National Statistics (ONS) shows that annual sales of growth is reduced by 4 percent last month from 4.7 percent in May. The report shows that was the slowest in annual sales since September 2014.

Office for National Statistics said the annual growth rate was still “strong”. The sales volumes in April to June quarter were up by 0.7 percent from the previous quarter and also online sales in June increased by 1.4% compared with May, which accounted for 12.4 percent of total retail sales.

Investors/traders “this is one of the reasons BoE is skeptical about the rate increase, the economy is not healthy enough to sustain itself at a higher rate”.

Canada Retail Sales

Canada retail sales up 1 percent in May after last week’s rate cut by the Bank of Canada. Sales of new cars and Gasoline were the two factors that helped alleviate investors’ concerns regarding the direction of the Canadian economy after a series of disappointing data in the second quarter.

Bank of Canada in its press release statement last week said it has cut the overnight rate by one-quarter of one percentage point to 1/2 (half) percent. The Bank’s estimated Canada growth of 2015 has been reduced considerably from its April projection.

The downward projection was as a result of a drop in business investment plans in the energy sector and also the result of weaker than expected exports of non-energy commodities and non-commodities have really impacted the economy, the GDP is now projected to reflect a modest contraction in the first half of the year, according to the statement released by the bank.

New Zealand

The reserve bank of New Zealand has cut interest rates for the second time in two months and says more easing is likely. The central bank cut rate to 3 percent, stated a slow economic outlook and low inflation rate as the reason. The farming-dependent economy that relies on export for sales of its farm produce has been hit by a drop in dairy prices since last year. Dairy exports make up a substantial percentage of the economy, therefore making it vulnerable to any volatility.

Economy data shows that global dairy prices have fallen more than 60 percent since 2014, which has drastically reduced export demand and revenue, the effect of China’s economy also contributed to the embattled nation’s economic crisis. China is a big importer of New Zealand dairy products and since losing over $3 trillion dollars and slow economic growth rate the quantities imported by the Chinese have reduced.

According to RBNZ Governor Graeme Wheeler in a statement “At this point, some further easing seems likely”, he added that the construction activity to rebuild Christchurch after the 2011 earthquake “appears to have peaked”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

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The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

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IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

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South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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