Global Macroeconomic Review
United States: In the third quarter of 2024, the U.S. economy demonstrated notable resilience, growing by 2.8% thanks to strong consumer spending and increased business investment in equipment. This uptick in consumer spending, driven by a solid labor market and improved household wealth, marked its fastest growth since early 2023, contributing 2.46 percentage points to the GDP increase. However, economists anticipate a slowdown in the fourth quarter due to factors such as the Boeing strike, hurricane effects, and ongoing geopolitical tensions…
United Kingdom: The UK economy experienced modest growth of 0.1% in Q3’24, the slowest rate in three quarters, down from 0.5% in Q2 and below the 0.2% forecast. The services sector also grew by 0.1%, driven by increases in professional, scientific, and technical activities (0.7%) as well as wholesale and retail trade (0.6%). However, inflationary pressures remain, exacerbated by a recent £70 billion government budget funded by higher taxes. In response, the Bank of England lowered interest rates from 5% to 4.75% to ease borrowing costs for households and businesses…
Domestic Macroeconomic Review
Strong GDP numbers; Uptick in Inflation; Hike in benchmark interest rate.
In Q3 2024, Nigeria’s economy witnessed a growth of 3.46%, largely fueled by the services sector, which accounted for over 53% of the economic output and expanded by 5.19%. Despite this growth, inflation rose sharply to 33.9% in October, the highest level seen in nearly thirty years, primarily driven by increases in food and transportation costs. Food inflation specifically soared to 39.16%, highlighting the rising prices of essential staples such as rice and vegetable oils. On a positive note, unemployment rates improved to 4.3% in Q2, indicating progress in job creation as more individuals turned to self-employment following job losses in the formal sector…
Market Update
Foreign Exchange Market: The Nigerian foreign exchange market displayed mixed trends in November, driven by improved dollar liquidity and strategic interventions by the Central Bank of Nigeria (CBN). At the NAFEM window, the CBN sold over $400 million in interventions, with rates ranging from ₦1,640/USD to ₦1,660/USD across multiple sessions. The interbank market, however, remained under pressure, with trades spanning ₦1,557/USD to ₦1,722/USD due to persistent demand for foreign exchange. Significant inflows from Foreign Portfolio Investors (FPIs) targeting high-yield government securities and exporter proceeds supported liquidity. Despite these efforts, suppliers of foreign exchange sought higher levels to sell their proceeds, reflecting persistent demand pressure in the market…
Money Market: The interbank market experienced significant liquidity fluctuations in November, with opening balances varying widely due to diverse funding activities. The month began with a credit of ₦375.53 billion, which transitioned into deficits driven by net CRR debits, OMO auction settlements of ₦1.447 trillion, and other outflows. Despite intermittent improvements from CBN SWAP maturities, promissory note inflows, and FAAC distributions, these inflows were outweighed by FX settlements and FGN bond-related funding obligations…
