Good morning

Quiet trading conditions ahead of NFP (Non-Farm Payrolls) at 1.30pm (Ldn) today. Market expects in the region of 230-240k jobs being created vs 252k last month. As we mentioned in the blog a few days ago we do not expect any “fireworks” or exceptional number given the severe weather conditions in the US in January. Unemployment though could fall to 5.50% from 5.60%, but it is really the NFP number that everyone is interested in. EURUSD has been trading sideways for the past 24 hours – just look at the table and you can see the narrow high low margin. As I wrote above, we are all waiting for NFP before the next move ensues.

Greece: when will this beautiful country sort out its mess. Just a few days ago I wrote that the EUR rallied after a softer rhetoric from Greek Fin Min. It was then surprising to hear that The German Finance Minister and his Greek counterpart who met yesterday in Berlin,  failed to reach an agreement on ending or modifying Greek austerity measures. Wolfgang Schaeuble noted that they had “agreed to disagree”. But in Athens, the Greek Prime Minister reiterated that “austerity is not a rule of the European Union.” This story is going to be dragged through the mud for some time. There will be comments from both camps, both trying to out-muscle the other and gain superiority. What the Greeks must accept, is Germany “runs” the EU and is generally seen by most as the number member. The Germans are not looking to wag the finger at the Greeks adding, “you will do as we say, or else”. In fact they are trying to find a happy medium where all EU members will be happy with the outcome. Like I said above, this is going to drag on for some time!

Meanwhile, the ECB continues its “carrot and stick” approach toward Greece. The ECB will allow Greek banks up to €59.5bn in emergency cash. Under the measure, the Greek central bank is allowed to provide liquidity to these banks at its own risk. This follows Wednesday’s ECB decision to end a waiver on the quality of Greek debt it would accept as collateral. It is pretty obvious everyone is trying to woo the Greeks into accepting that austerity stays and that Syriza must continue the good work the previous party had begun. The strange thing is, the hard work was paying off. I really hope that is not tossed aside. It will set things back and more importantly hurt the Greek economy which is starving and struggling to stay afloat.

Nigeria’s NGN fell to a new record low on Friday despite rebounding crude prices, while the ZAR traded near a two-month high with the dollar showing weakness after seven straight months of gains. Nigerian inflation rate has picked up to 8% as per December data while GDP growth has eased to 6.23% from a year earlier in the Q3. November CPI rate was 7.9% and the Q2 GDP growth was 6.54%. The Nigerian central bank left its key rate unchanged at 13% at the 20 January meeting. It had hiked the rate 100 basis points in the November review in order to stabilise the economy and currency amid the sharp slide in crude prices. Nigeria is Africa’s largest oil producer and gets 70% of its revenues from oil exports. The naira is under pressure due to the slide in oil prices since June last year. While the slide in the NGN has gone some way to help, business has suffered from the fall (importers). Exporters continue to shine as the value of the NGN has fallen from 164 (to the USD) to 193.25 presently. As things stand, the overall view for the economy remains tough with global markets continuing to impact the local economy.