Global Economy

U.S.A: The U.S. labor market rebounded in November as nonfarm payrolls surged by 227,000, exceeding expectations of 200,000 and reflecting recovery from hurricanes and strikes that disrupted hiring in October. The unemployment rate, however, ticked up to 4.2%, driven by a decline in household employment and a drop in the labor force participation rate to 62.5%. Job gains were widespread, led by healthcare, leisure & hospitality and manufacturing. Notably, wage growth remained robust, with average hourly earnings rising by 4.0% y/y. The average workweek also increased to 34.3 hours, contributing to a 0.8% rise in aggregate payroll income, which bodes well for consumer spending. The probability of a Federal Reserve rate cut at its December meeting rose to 89%, reflecting optimism about the economy’s expansion amidst easing inflationary pressures.

 

Sub-Saharan African Economies

 

Euro Area: The Eurozone’s GDP growth in Q3 2024 climbed to 0.4% q/q, marking the strongest growth in two years, according to Eurostat’s third estimate released Friday. This robust performance, fueled by increased household and government spending alongside higher inventories, exceeded the 0.2% growth recorded in Q2. However, net trade slightly dampened the gains, with exports falling 1.5% while imports rose 0.2%. On a y/y basis, GDP growth stood at 0.9%, up from 0.5% in the previous quarter. Ireland led with a remarkable 3.5% quarterly growth, while Spain grew by 0.8%, benefiting from a strong labor market and booming tourism. France and Germany saw growth of 0.4% and 0.1%, respectively, with Germany narrowly avoiding a recession despite persistent challenges such as rising energy costs and competitive pressure from Chinese manufacturers. Analysts suggest this better-than-expected growth may influence the European Central Bank’s decision to favor a 25-basis-point rate cut over a more aggressive approach.

Ghana: Ghana’s annual inflation rose to 23% in November 2024, driven by surging food prices, while monthly inflation jumped 2.6%. With elections on December 7, the cost-of-living crisis is a key voter concern.

Nigeria: Nigeria returned to the international debt market after two years, raising $2.2 billion through a dual-tranche Eurobond issuance. The offering included a $700 million 6.5-year bond at 9.625% and a $1.5 billion 10-year bond at 10.375%. Despite high rates, strong investor interest saw orders surpass $9 billion, signalling confidence in Nigeria’s economic prospects.

Kenya: Kenya’s central bank cut its benchmark rate by 75 basis points to 11.25%, its third consecutive reduction, to stimulate growth amid slowing economic activity. Inflation remains low at 2.8%, supported by stable food and fuel prices.

 

Domestic Economy

Major updates during the week:

  • Nigeria’s total capital importation dropped by 51.9% to $1.25 billion in Q3 2024, despite a surge in FDI to $103.82 million, with FPIs dominating at 71.79% and the banking sector leading inflows.
  • The CBN launched the electronic foreign exchange matching system (EFEMS) to curb FX market distortions, supported by a $2.2bn Eurobond issuance and festive remittance inflows, which strengthened the naira to ~₦1,500/USD, though long-term stability hinges on structural reforms.
  • Nigeria’s manufacturing PMI rose to 49.6 in November 2024, reflecting improved orders and output but remaining below 50 for the fifth consecutive month.

 

 

Nigerian equity market: NGX rebounds into bullish territory this week amid sector-wide buying interest

The Nigerian stock market closed the week bullish, driven by strong buying interests in MTNN, SEPLAT, ACCESSCORP, and GTCO, which outweighed selloffs in ARADEL, ZENITHBANK, and FCMB. The All-Share Index (ASI) rose 0.72% to 98,210.75 points, while market capitalization increased by ₦318.59 billion to ₦59.22 trillion. Top gainers included WAPCO (+27.59%), BETA GLASS (+16.31%), and SEPLAT (+7.55%). All five major sectoral indexes closed positive, with the insurance sector lead

Nigerian fixed-income market: Treasury market sees rising yields despite robust subscriptions

The treasury bills market closed the week on a bearish note as average yields rose by 56bps, despite inflows from unmet auction demand into the secondary market. The Debt Management Office (DMO) offered ₦583.25bn in treasury bills during the week, attracting a total subscription of ₦2.58 trillion, with the 364-day paper dominating at ₦2.52 trillion. Eventually, the DMO sold ₦756.71 billion, exceeding the initial offer by 30%, reflecting robust investor appetite for longer-term instruments. Similarly, the FGN bond market traded quietly during the week as attention shifted to the NTB Primary Market Auction (PMA). Despite subdued trading activity, the bond market closed bearish, with average yields dipping marginally by 3bps.