Global Economy

09 July 2018 ( Lagos ) : After months of rhetorical exchanges between Washington and Beijing, the U.S. tariffs on $34 billion worth of Chinese goods commenced today, with retaliatory tariffs from China immediately implemented. Notably, with China extending its tariffs on U.S. to include refined petroleum products, Chinese refiners are looking elsewhere for oil imports. Also, the EU is compiling a list of American goods for new tariffs. 

Elsewhere, data released today by the U.S. Bureau of Economic Analysis showed that US trade deficit (goods and services) declined to $43.1 billion in May (vs. $46.1 billion in April), as exports (+1.9% MoM to $215.3 billion) outpaced imports (+0.4% MoM to $258.4 billion). 

Further in the region, after falling to 3.8% in May, the US unemployment rate rose to 4.0% in June as just over 600,000 workers joined the labor force.

Domestic Economy

The Central Bank of Nigeria released its Balance of Payment statistics for Q1 18 wherein current account (CA) balance extended its surplus position for the sixth consecutive quarter (+22.2% QoQ to $4.5 billion), largely supported by widening surplus in trade balance (+5.1% QoQ to $5.8 billion) and current transfer (+10% QoQ to $6.4 billion) even as income (- 9.7% QoQ to $3.3 billion) and services (-5.1% QoQ to $4.4 billion) extended deficit run. 

Whilst oil-driven export continues to outpace import to leave trade surplus intact, it was the case of improved workers remittances that buoyed current transfer surplus. On the deficit leg, persisting net debit in income was on the back of further contraction in investment in- come while net debit in travel and transport drove services deficit for the period.

Reporting for EasyKobo on Monday, 9 July 2018 in Lagos, Nigeria

Source: ARM Securities Limited

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