Monthly Economic and Financial Market Outlook - Will Crude Oil Market Receive the Required Stimulus?


Monday, December 10, 2018 03:08 PM / FSDH Research


FSDH Research has released its monthly Economic and Financial Market Outlook Report for the month of December 2018.


The major highlights of the report are:

Domestic Scene:

  • There are measures to stop the continuous decline in the crude oil price despite counter measures from the US
  • The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members have agreed to a crude oil production cut
  • FSDH Research believes the trade war ceasefire between China and US should stimulate global growth and lead to recovery in crude oil market
  • Low oil price has damaging impacts on the Nigerian economy
  • If low oil price continues there may be a devaluation of the currency, increase in inflation rate and interest rate/yields may rise
  • Non-performing  loans in the banking system may also increase because of low oil price
  • The increase in the Purchasing Managers’ Index (PMI) published for the month of November is an indication of an increase in the economic activities that are usually associated with the last quarter of the year
  • FSDH Research forecasts that the inflation rate for November 2018 will trend upwards to 11.31% on account of higher food prices
  • FSDH Research notes that the proceeds from the US$2.86bn Eurobond issuance contributed to the growth of external reserves in November
  • As expected, the yields on the Federal Government of Nigeria securities (except on 91-Day NTB) increased in November compared with October
  • The oversold positions of stocks may attract the interest of domestic investors. Fund Managers’ activities may also drive the market up in December.


International Scene:

  • The current economic developments support arguments for a further hike in interest rate in the US. FSDH Research expects the FOMC of the US Federal Reserve to raise interest rates by 0.25% when it meets on 18-19 December 2018.


Please click here to download our strategy report for the month of December 2018.


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