Week Ahead: Nigeria Elections, Central Bank Talks, and Brexit

This will likely be an important week for the market as traders watch a number of things including the Nigerian elections and the US politics. The following could be the top things to watch this week.

Nigerian Election

Nigeria is the biggest economy in Africa with a GDP of more than $375 billion. The country will go to polls this week, wrapping up a campaign period that has been increasingly divisive. Nationally, the incumbent Buhari will face with the former vice president, Atiku Abubakah. This election matters for a number of reasons. First, Nigeria is a major crude oil exporter, producing almost 2 million barrels per day. Therefore, any instability in the country would likely reverberate in the oil market. Second, Nigeria is a major investment destination for emerging market investors.

Central Bank Speakers

This week, investors could focus on a number of central bank speakers. Tomorrow, German’s Bubba president Frank-Walter Steinmeier will speak, in a speech that will be watched closely by investors. He will be followed by Bank of England’s Mark Carney and Fed’s Jerome Powell. On Wednesday, Fed’s Esther George and Loretta Mester and ECB’s Sabine Lautenschlaeger will speak. These speeches will be watched closely by investors because they may help them understand the views of the key policymakers.

Reserve Bank of New Zealand (RBNZ)

On Wednesday, the Reserve Bank of New Zealand (RBNZ) will release the interest rates decision for February. The central bank is expected to leave interest rates unchanged at 1.75%. This meeting will come a week after the Reserve Bank of Australia (RBA) meeting. Last week, all the central banks that met lowered the expectations of a rate hike, which led to a sharp decline in the New Zealand dollar. This is because investors expect a dovish tone by the bank.

Economic Data

This week, there will be a bunch of key economic data that will be released. Today, the UK will release the GDP, industrial production, and manufacturing production data. This data could be watched closely because investors are still concerned about the impacts of the uncertainty on Brexit in the country. Tomorrow, investors will receive the JOLTs job openings numbers for December. Investors expect the number to show an increase of 7.063 million. However, this is a lagging data because it will be for December. On Wednesday, they will receive the industrial production from the EU, UK CPI numbers, Swedish central bank decision, and crude oil inventory numbers. Other data will be the US CPI numbers and the building permits data. On Thursday, investors will receive Japan’s GDP numbers, China’s trade data, German GDP numbers, and Swiss PPI. The US will also release the retail sales and jobless claims numbers. On Friday, the UK will release the retail sales numbers and trade data.

Brexit

Traders may continue to focus on Brexit. Last week, Theresa May travelled to Brussels, where the EU leaders rebuffed her. This raised the probability of a no-deal Brexit, which will expose the country to huge shocks in the next few weeks.

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