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FXTM Analysis – Investors on high alert as trade tensions intensify

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Lukman Otunuga, Research Analyst at FXTM, comments on investors’ mood as US – China trade tensions intensify.

Donald Trump’s latest threat to impose fresh tariffs on China has roiled financial markets and left investors on high alert.

In a shocking development, Trump yesterday warned of his intention to impose tariffs on an additional $200 billion worth of Chinese goods.

This undesirable move is likely to worsen US-China trade relations and fuel concerns of a potential global trade war.

The ongoing friction between the two nations has clearly kept market players on edge, with global stocks sliding amid the growing caution.

With the escalating ‘tit-for-tat’ trade war seen as a major risk to global stability, investors may offload riskier assets for safe-haven investments.

More pain ahead for emerging markets?

Emerging market currencies have been treated without mercy by a broadly stronger Dollar.

The intensifying trade tensions between the United States and China simply added to market jitters, consequently weighing heavily on emerging markets.

While the prospect of higher US interest rates is likely to stimulate fears of capital outflows from emerging markets, global trade concerns present a major risk.

Intensifying trade tensions may trigger fears of increasing global protectionism negatively impacting growth in developing nations – ultimately spelling more trouble for EM currencies and stocks.

South African Rand crumbles

The South African Rand has tumbled to its lowest levels in over six months as escalating trade tensions between the world’s two largest economies eroded appetite for riskier currencies.

An appreciating Dollar simply compounded to the Rand’s woes with price punching above 13.90 as of writing.

It must be kept in mind that the Rand was not alone, as other major emerging market currencies were under attack from a broadly stronger Dollar. The Rand has scope to weaken further if the Dollar continues to strengthen and global trade fears dent risk sentiment.

Oil slips on eroding risk appetite

A lack of appetite for risk amid the US-China trade dispute has resulted in Oil prices depreciating today.

Market expectations over OPEC and Russia easing supply curbs to counterbalance falling output from Venezuela as well as production outages from Iran have eroded appetite for the commodity.

Although a hike in production output seems to be priced in, Oil remains at risk of depreciating further if Friday’s OPEC meeting in Vienna ends in an impasse. It must be kept in mind that Iran, Venezuela and Iraq are expected to veto any decision made by Saudi Arabia and Russia to raise production levels.

Any disagreements or infighting between cartel members during the talks may trigger fears over the future of OPEC’s production cut deal.

WTI Crude is currently bearish on the daily charts with prices breaking below $65.00 this afternoon. Sustained weakness below this region could encourage bears to target $64.35 and $64.00, respectively.

Commodity spotlight – Gold

Gold has descended into the abyss despite intensifying trade tensions rattling financial markets and leaving investors on edge. The driver behind Gold’s depreciation remains an appreciating US Dollar.

With the Dollar likely to find ample support amongst the bullish sentiment towards the US economy and heightened expectations of higher US interest rates, Gold could be poised for further punishment.

While the argument for the precious metal to potentially rebound may be based around trade tensions and geopolitical uncertainty, an appreciating Dollar could continue obstructing any upside gains.

Focusing on the technical picture, Gold is under pressure on the weekly timeframe. Sustained weakness below $1,280 level could be an early indication that bears are back in the game.

Previous support at this level could transform into a dynamic resistance that opens a path towards $1,264.

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Finance

Immigration Office Place Ex Governor, Yahaya Bello On Watchlist While IG Of Police Withdraws All Police Officers Attached To Him

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The Inspector General of Police, Olukayode Egbetokun, has withdrawn all police officers attached to the embattled former Governor of Kogi State, Yahaya Bello.

The order for the withdrawal was contained in a police wireless message. The document with reference number:

“CB:4001/DOPS/PMF/FHQ/ABJ/VOL.48/ 34 reads in part;“IG has ordered the withdrawal of all policemen attached to His Excellency and former Executive Governor of Kogi State, Alhaji Yahaya Bello. Acknowledge compliance and treat with utmost importance.

Please, above, for your information and strict compliance.”

Meanwhile, the Nigerian Immigration Service has placed the former governor on its watchlist.

This comes after the Economic and Financial Crimes Commission on Thursday, April 18, declared him wanted in connection to an alleged case of money laundering to the tune of N80.2bn.

From EFCC

In a circular signed by an Assistant Comptroller of Immigration, DS Umar, for the Comptroller-General, Kemi Nandap, the NIS detailed the former governor’s name, nationality, and passport number.

From National Immigration Office

And read;

“I am directed to inform you that the above-named person has been placed on the watch list.

Suffice to mention that the subject is being prosecuted before the Federal High Court Abuja for conspiracy, breach of trust, and money laundering vide letter Ref; CR; 3000/EFCC/LS/EGCS.1/ TE/Vide/1/279 dated April 18, 2024.

If seen at any entry or exit point, he should be arrested and referred to the Director of Investigation or contact 08036226329/07039617304 for further action.” the circular reads in part.

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Finance

BREAKING: EFCC Declares Former Kogi State’s Governor, Yahaya Bello Wanted

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The Economic and Financial Crimes Commission has declared a former governor of Kogi State, Yahaya Bello, wanted for offences relating to economic and financial crimes.

This was contained in a notice posted on the commission’s official Facebook page on Thursday.

The notice read, “The public is hereby notified that Yahaya Adoza Bello (former Governor of Kogi State), whose photograph appears above is wanted by the Economic and Financial Crimes Commission in connection with alleged case of Money Laundering to the tune of N80,246,470,089.88

“Bello, a 48-year-old Ebira man, is a native of Okenne Local Government of Kogi State.

“His last known address is: 9, Benghazi Street, Wuse Zone 4, Abuja.”

The notice asked anybody with useful information about the former governor’s whereabouts to contact any of the commission’s offices across the country.

The anti-graft commission had earlier stated that it would, on Thursday (today), arraign the former governor before a Federal High Court sitting in Abuja.

This was after the EFCC was granted a warrant of arrest by the Federal High Court in Abuja to apprehend the former governor.

Punch reported that The agency’s team of lawyers, led by Kemi Pinheiro, SAN, during the proceedings on Thursday, said that EFCC operatives were prepared to carry out the arrest warrant for the former governor, even if it requires the use of force.

Bello and three other suspects, Ali Bello, Dauda Suliman, and Abdulsalam Hudu, will be arraigned before Justice Emeka Nwite.

They face 19 counts related to money laundering to the tune of N80,246,470,088.88.

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Finance

Naira Abuse: Court Grants Cubana Chief Priest ₦10M Bail

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The Federal High Court in Lagos State, on Wednesday, granted businessman and socialite, Pascal Okechukwu, popularly known as Cubana Chief Priest, N10m bail with two sureties in like sum.

On Tuesday, EFCC slammed him with 3 count charge over the abuse of naira and asked him to report to court.

In court, The celebrity bar man pleaded not guilty to tampering and abusing the naira during his trial.

Earlier on Sunday, the EFCC revealed that it was probing several celebrities over alleged abuse of Naira notes.

In a statement, its spokesperson, Dele Oyewale, said;

“Many of them have made useful statements to the commission and many more have been invited by investigators working on the matter.

“The EFCC will not relent in its no-sacred-cow mode of operations and the public should be wary of running afoul of laws against the crime.”

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