Nigeria in the Week Ahead By Lukman Otunuga

• Otunuga is a Research Analyst at FXTM

It will be a relatively quiet week for Nigeria data-wise as there are no Tier 1 reports scheduled for release.

However, a buildup is likely as markets prepare for the latest inflation figures and central bank decision next week.

While it is widely expected that the Central Bank of Nigeria will leave interest rates unchanged, any signs or hints of a possible rate cut in the future could boost sentiment towards the Nigerian economy.

With the Federal Reserve and other major central banks already signaling a willingness to cut interest rates to support their local currencies, emerging markets could follow these footsteps.

In other news, Nigeria has signed an agreement that has the potential to increase trade between African countries. The African Continental Free Trade Area (AfCFTA) deal could become the world’s largest.

This is certainly an encouraging development for Nigeria, as increased trade between partners across the continent is supportive of growth potential.

Global markets should be sensitive and highly reactive in the week ahead following last Friday’s “Goldilocks” US jobs report.

Signs of the US economy stabilizing will most likely complicate the Fed’s decision to cut interest rates. Should speculation of a US interest rate cut diminish further on improving fundamentals in the United States, Dollar bulls could make an uninvited return – ultimately punishing the Rand and other emerging market currencies.