The dollar weakened versus all of its major peers and gold jumped the most in two weeks as prospects for a U.S. interest-rate hike this year remained subdued. Equities declined in Europe and Asia as oil retreated.
The Bloomberg Dollar Spot Index sank to its weakest since June ahead of U.S. reports on housing starts, inflation and industrial output. The Stoxx Europe 600 Index fell the most in two weeks as U.S. stock index futures declined. Japanese shares led losses in Asia as the yen climbed toward 100 per dollar. Crude snapped a three-day surge before American stockpiles data and nickel fell following its biggest jump of the month. U.K. government debt gained before the Bank of England conducts a bond-buying auction.
The dollar is losing ground and global equities are near a one-year year high as lackluster data in the world’s biggest economies fuel speculation the Federal Reserve will refrain from raising interest rates amid monetary easing in Asia and Europe. The probability of a U.S. interest-rate increase in 2016 is below 50 percent and the greenback has lost ground versus 15 of 16 major peers in the past month.
“The yen is being driven by the dollar’s weakness, spurred on by increasing expectations the Federal Reserve won’t raise rates this year,” said Nicholas Teo, a strategist at KGI Fraser Securities in Singapore. “If the Fed doesn’t move this year, there’s a risk of steeper moves next year. That’s very dangerous.”
U.S. data on Tuesday are forecast to show consumer prices were unchanged in July from the previous month, while housing starts were at about the same level as in June and industrial output gains slowed. The U.K. will also report on consumer-price growth, which will be the first hard data on how the economy performed in the month following the country’s June 23 vote to leave the European Union.
The yen strengthened 0.9 percent to 100.33 versus the greenback as of 8:12 a.m. London time, while Bloomberg’s dollar index sank 0.4 percent.
“The yen could test the 100 mark due to further softening of the dollar,” said Ray Attrill, co-head of foreign-exchange strategy at National Australia Bank Ltd. in Sydney. “A sustained break of that level would up the pressure on the BOJ to take steps at its September meet to support it.”
The MSCI Emerging Market Currency Index climbed to its highest since June 2015 as South Korea’s won strengthened 0.9 percent and the currencies of Malaysia, Hungary and Poland gained at least 0.4 percent.
The pound rose 0.1 percent to $1.2893, after a Monday close of $1.2880 that was the weakest since June 1985. The currency has lost more than 2 percent this month versus the dollar, the worst performance among major currencies.
The Stoxx Europe 600 Index declined 0.6 percent, slipping for a third day.
Linde AG jumped 4.4 percent after it was reported to have held merger talks with Praxair Inc., a deal that would create the world’s largest supplier of industrial gases.
Futures on the S&P 500 were 0.2 percent lower, after the U.S. benchmark ended the last session at a record high. Asset managers in the U.S. are favoring stocks over Treasuries, while active equity funds are the most bullish since 2008, according to Bank of America Corp.
The MSCI Asia Pacific Index of shares fell 0.2 percent, extending Monday’s retreat from a one-year high. Japan’s Topix index slid 1.4 percent and the Shanghai Composite Index retreated from its best close since January. Hong Kong’s Hang Seng Index was little changed near a nine-month high.
Bank of Guiyang Co. soared by the 44 percent daily limit on its first day of trading in Shanghai even after a spate of warnings that the nation’s bad loans are understated and lenders may need bailouts in coming years. Jet Airways India Ltd. declined for a sixth day in Mumbai after reporting a 54 percent drop in first-quarter profit.
Oil fell 0.8 percent to $45.37 a barrel in New York as the market weighed expectations for U.S. stockpiles rising further from a record against speculation that informal OPEC talks next month may revive discussions to freeze output. It jumped 10 percent over the last three trading sessions as Saudi Arabia indicated it’s prepared to discuss stabilizing the market. U.S. crude inventories probably increased by 900,000 barrels, rising for a fourth week and keeping supplies above the five-year average for this time of year.
Most industrial metals slipped after an index of the main contracts traded on the London Metal Exchange posted the biggest gain in two weeks on Monday. Nickel dropped 1.5 percent in London, after climbing 2 percent in the last session, and zinc was down 0.3 percent.
Gold added 0.7 percent, buoyed by expectations U.S. interest rates won’t be raised anytime soon. Platinum gained more than 1 percent.
The U.K.’s 10-year yield declined one basis point to 0.52 percent, near a record low, before the Bank of England seeks to buy 1.17 billion pounds ($1.5 billion) of debt due in more than 15 years as part of its expanded quantitative-easing program. The central bank fell short of achieving a similar target at last week’s bond-buying auction, spurring gains in longer-dated gilts.
The yield on U.S. Treasuries due in a decade fell three basis points to 1.53 percent. Rates on similar-maturity debt in Germany and Japan decreased by about one basis point to minus 0.09 percent and minus 0.10 percent, respectively.
Noble Group Ltd.’s dollar-denominated bonds fell for a second day after the Singapore-listed commodity trader’s debt rating was cut two levels by Moody’s Investors Service, which said liquidity could come under pressure over the next 12 months amid weaker-than-expected profitability. The notes due 2020 fell to 77.26 cents on the dollar, giving a yield of 15.52 percent.
Envoy Considers Establishment Of Chinese Banks In Nigeria To Boost Economy
Mr Cui Jianchun, the Chinese Ambassador to Nigeria, says he is in talks with Chinese owned Banks to establish operations in Nigeria.
This, the envoy said, is to boost Nigeria’s economy and expand trade relations between the two nations.
Cui made this known on Tuesday in Abuja while addressing Journalists during the commemoration of the 2021 Chinese Moon Festival and China-Nigeria Cultural week.
According to Cui, the establishment of Chinese Banks in Nigeria will also be one of the key areas of discussion during the China-Nigeria Binational Committee meeting, which he is also pushing for the establishment.
He said that an efficient financial institution was a key driver to achieving a strong economy, one Nigeria can learn from China’s experience.
“Before my departure from Beijing to Abuja, I talked to several banks in China. When you list the World’s 10 big banks, six are in China.
“The Banking sector is very important, because, without money, we cannot build our industries.
“What I am thinking here is best to talk to the governor of Central Bank and how we can allow the Chinese Banks to run office here and now, they are doing the feasibility studies on that.
“I am working hard that in the Bi-national meeting, I hope we can make a big decision and give a big push to let the banking industry and insurance industry because financial integration and institutions are key.
“If you go to China, you will find our banking industry is very powerful, not only for business but the change in the way of life.
“Because of the COVID-19, the Banking Industry is a little hesitant, but I told them Nigeria has a lot of human resources and as long as we work together, we can do big things.
“And that is why it is important to invest in the banking industry, to solve this problem,” Cui said.
Extolling the extant China-Nigeria trade relations, Cui noted that the volume of trade between China and Nigeria is nearly 20 billion US Dollars, with an increase from 2020’s 19.2 billion dollars.
Cui said the Chinese economy is restoring to the normal post-COVID-19 pandemic and both governments are working hard on how to expand imports and exports.
Speaking on the event, Cui said the China’s moon festival is a very important and significant one for China as it symbolises family reunion, national peace and social harmony.
The envoy said the 2021 celebration is also a special one as it coincides with the 50th Anniversary of China-Nigeria’s bilateral relations.
He said that both countries also share Oct. 1 as their National Days.
He said it is also on that note that the Chinese Embassy is honouring 50 Nigerian employees of Chinese Companies in Nigeria for their outstanding performance and contribution to strengthening diplomatic ties.
Dr Ifeoma Anyanwutaku, the Permanent Secretary, Federal Ministry of Information and Culture, also lauded the Nigeria-China relations.
She said the relations had recorded great successes over the past five decades.
“The five decades of co-operation had since witnessed several cultural activities and exchanges in the spheres of arts, music, dance, exhibition, cultural administration, training and capacity building of cultural officers.
“And recently, the development of Cultural Industries centres in Nigeria, among others.
“I must add that China, through the youth-oriented programmes such as the photos competition and similar activities in the past is surely a dependable ally.
“In redirecting the energy and mind of our youth to creative ventures, thereby furthering the Nigerian government’s policy of lifting a hundred million Nigerians out of poverty in the next 10 years”, Anyanwukatu said. (NAN)
Lagos Prohibits Open Cattle Grazing, Sanwo-Olu Signs Bill Into Law
Lagos State Governor Babajide Sanwo-Olu, on Monday, assented to the bill prohibiting Open Cattle Grazing and Trespass of Cattle on Land, signing the legislation into law 11 days after it was unanimously passed by the State House of Assembly and transmitted to the Executive arm for authorisation.
By implication, it is now criminal in Lagos for cattle rearers to occupy unapproved public areas and private land with their livestock for grazing. The law also prohibits the act of moving cattle round public places by herders.
The signing of the anti-open grazing law by the Governor followed the decision of Southern Governors’ Forum last August, setting the September deadline to pass the law across member States.
There have been crises witnessed in some States, resulting from alleged open grazing.
Although farmer-herder crisis is not pronounced in Lagos, the anti-open grazing law is expected to prevent the spillover of the menace into the State.
Sanwo-Olu, who assented to the bill during the State’s Executive Council meeting in Alausa, directed the security agencies to swing immediately into action and enforce provisions of the law.
He said: “By the powers vested in me as the Governor of Lagos State, I am signing the bill on Open Cattle Grazing and Trespass of Cattle on Land into law to prohibit issues associated with open grazing of livestock.”
The Governor also signed legislation transforming the Lagos State Domestic and Sexual Violence Response Team (DSVRT) into a full-blown agency.
The development coincided with the commemorative month dedicated to raising awareness on gender-based violence in the State. The Governor and members of the State’s cabinet wore attire with purple shades to support the campaign against sexual violence.
The DSVRT legislation provides for the establishment of Sexual Offenders’ Register that would help the State efficiently tackle violations in the communities.
After signing the law, Sanwo-Olu said: “Raising awareness about domestic and sexual violence is an important piece of working to end the cycle of violence. It is important to reiterate the State Government’s zero tolerance to all forms of sexual and gender-based violence. We will not rest on our oars until the menace is reduced to the barest minimum in Lagos.”
The Governor appointed Mrs. Titilola Vivour-Adeniyi as the Executive Secretary of the new agency.
Vivour-Adeniyi was the coordinator of the response team before the legislation was signed into law.
ECOWAS Imposes Sanctions on Guinea Junta Over Coups
West African leaders have decided to impose travel bans and freeze the financial assets of members of Guinea’s ruling junta and their families after a coup more than a week ago.
The decisions were announced Thursday after an Extraordinary Summit on Guinea in Ghana’s capital, Accra. Mediators with the regional group had traveled to Guinea to meet with junta leaders and check on the condition of deposed President Alpha Conde.
ECOWAS president Jean Claude Brou said the West African leaders have also insisted that there should be no “need for very long transition for the country to return to democratic order.”
The targeted sanctions come after Guinea’s coup leaders set a number of conditions for releasing Conde, according to the foreign minister of Ghana.
ECOWAS had already warned it will impose penalties on the junta in Guinea unless it immediately releases Conde, who has been held at an undisclosed location since being detained during the Sept. 5 coup in Conakry.
“We are coming to address a burning issue in the region,” said Ghana’s President Nana Addo Dankwa Akufo-Addo, the current chair of the regional bloc, ahead of the summit. He was joined by presidents or high-ranking officials from eight of the other 15 ECOWAS countries.
Members of the ECOWAS delegation that visited Conakry after the coup presented their reports at Thursday’s meeting, said Ghanaian Foreign Minister Shirley Ayorkor Botchway. The junta has set a number of conditions for complying with the demands of regional mediators, she said but declined to disclose what they are.
The delegation has spoken with Conde’s doctor “who ascertained that indeed physically, he’s very well,” she said. However, she said, the ex-president is still coming to terms with the fact that his government has been toppled after more than a decade in power.
“For anybody who has gone through such a traumatic experience like he did, mentally, it’s not the best, not to say that mentally we found anything wrong, but he was quite shocked; he’s still in a state of shock,” she added.
Meanwhile, in Conakry, junta leaders were also set to meet with mining company representatives on the third day of a special summit to chart Guinea’s political future. Junta leader Col. Mamady Doumbouya has sought to reassure the country’s most vital economic sector that the political changes will not impact existing mining projects in the country, which has the world’s largest reserves of bauxite.
Guinea’s coup leaders have yet to make public their proposed timeframe for handing over power to a civilian transitional government, nor have they outlined how quickly new elections can be organized.
Conde had sparked violent street demonstrations last year after he pushed for a constitutional referendum that he used to justify running for a third term, saying term limits no longer applied to him. He ultimately won another five years in office last October, only to be toppled by the coup 10 months later.
At the time he came to power in 2010, he was Guinea’s first democratically elected leader since independence from France in 1958.
The regional bloc also planned to tackle concerns over whether a second member state, Mali, is making enough progress toward a return to democracy more than a year after a military takeover there.
In Mali, the ruling junta led by Col. Assimi Goita has committed to holding new elections by February 2022, though mediators who recently visited have expressed concern about whether that deadline now can be met.
Goita overthrew Mali’s president in August 2020 and then agreed to a civilian transitional government and an 18-month timeframe for holding a vote. However, only nine months after the first coup he effectively staged a second one, firing the civilian interim leaders and ultimately naming himself as president of the transition.
ECOWAS has not reinstated Mali’s membership in the bloc, marking the first time since 2012 that two of the 15 member states are suspended concurrently.
ECOWAS President Brou said there was the need to revisit the organization’s 2001 protocol on good governance “because a lot of things have changed or improved.”
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