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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

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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