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Tag: Lukman Otunuga

  • Inflation likely to ease to 18.8% in September report as Naira strengthens — FXTM analyst

    Inflation likely to ease to 18.8% in September report as Naira strengthens — FXTM analyst

    Lukman Otunuga, a Senior Research Analyst at FXTM Academy, has projected a decline in Nigeria’s inflation rate, predicting that the September 2025 Consumer Price Index (CPI) report — set for release on October 15 — will show inflation easing to 18.8 percent year-on-year from 20.1 percent in August.

    Describing October 15 as “the biggest macro event for Nigeria,” Otunuga attributed the expected decline to a combination of softer food prices and a strengthening naira, both of which may have helped to tame price pressures.

    Speaking in an interview, he noted that continued signs of cooling inflation could open the door for the Central Bank of Nigeria (CBN) to consider further interest rate cuts in November to boost economic growth.

    Beyond Nigeria, Otunuga highlighted a turbulent global financial landscape marked by geopolitical tensions and volatile market reactions. He said a 200-word post by former U.S. President Donald Trump on Truth Social wiped nearly $2 trillion off U.S. markets last Friday after Trump threatened to impose a 100 percent tariff on Chinese goods starting November 1.

    “The S&P 500 suffered its worst session since April, tumbling 2.7 percent, while Bitcoin collapsed and safe-haven gold surged amid the chaos,” he explained.

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    Otunuga added that weekend reports of the Trump administration’s openness to dialogue with China slightly eased concerns, though uncertainty remains high amid an ongoing U.S. government shutdown that began on October 1.

    He also noted that U.S. banks are expected to post strong Q3 earnings, supported by a rebound in investment banking and renewed mergers and acquisitions, buoyed by easing regulations and prospects of lower interest rates.

    On the commodities front, Otunuga revealed that gold touched a new all-time high above $4,070 on Monday amid U.S.-China trade tensions. “The precious metal has now posted eight straight weeks of gains and is up nearly 55 percent year-to-date,” he said, predicting that the rally could extend to $4,100 if support holds at $4,050.

  • Global economic events to drive corporate earnings surge, FXTM analyst predicts

    Global economic events to drive corporate earnings surge, FXTM analyst predicts

    High-impact global economic events are expected to drive strong corporate earnings for the world’s largest companies this week, according to Lukman Otunuga, Senior Market Analyst at FXTM.

    Otunuga noted that these developments will influence critical decisions in various countries, including Nigeria.

    As the Nigerian government continues implementing reforms to stabilise the economy, he projected that the Central Bank of Nigeria (CBN) will likely maintain interest rates at its meeting on Tuesday, citing persistently high inflation as a key factor.

    “Despite a third consecutive decline, inflation remains high at 22.2 percent year-on-year in June,” he said. Otunuga suggested that a rate cut by the CBN may only be considered in six months, depending on sustained reductions in inflationary pressures.

    On the domestic equities front, he pointed out that the Nigerian Exchange (NGX) All Share Index has surged nearly 10 percent so far in July, pushing total 2025 gains to about 30 percent.

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    “This puts the NGX ahead of the S&P 500 and Nasdaq 100, which have gained roughly seven and 11 percent this year, respectively,” he added.

    Despite challenges, the naira has held steady against the U.S. dollar this year, following a nearly 70 percent depreciation in 2024. However, Otunuga warned that Nigeria could face a new hurdle from August 1, 2025, when a 14 percent reciprocal tariff on its goods imported into the U.S. takes effect.

    Beyond Nigeria, Otunuga said global earnings season is heating up, with U.S. banks posting solid results last week and the focus now shifting to major tech firms like Alphabet and Tesla, which are set to report on Wednesday.

    He explained, “Alphabet shares climbed 14 percent in Q2, driven by robust AI demand and cloud business growth. But despite this, bulls may need a fresh catalyst to lift the stock out of negative territory for the year.”

    On Tesla, Otunuga noted the electric car maker is down nearly 20 percent year-to-date, cautioning that further losses are likely if its earnings disappoint.

    Key economic data from Europe, the United Kingdom, Japan, and the United States is also expected to sway market sentiment this week. However, he said the biggest event for forex markets will be the European Central Bank’s (ECB) rate decision on Thursday.

    “No rate change is expected, but any forward guidance could trigger fresh volatility,” Otunuga said, adding that traders currently see less than a 50 percent chance of an ECB rate cut by September.

    On the broader foreign exchange outlook, Otunuga observed that the U.S. dollar has weakened significantly, with the U.S. Dollar Index (DXY) sliding toward 97.70.

    “This softness may be due to growing pressure from former President Trump to cut interest rates and general caution ahead of the August 1 tariff deadline,” he concluded.

  • Global market volatility may impact naira, oil prices — FXTM analyst Otunuga

    Global market volatility may impact naira, oil prices — FXTM analyst Otunuga

    Lukman Otunuga, Senior Market Analyst at FXTM Academy, has highlighted how looming global economic events could influence Nigeria’s inflation outlook, oil prices, and the strength of the naira in the coming days.

    Speaking ahead of a week packed with high-risk financial developments, Otunuga noted that top-tier global data, including U.S. inflation figures, the start of the earnings season, and the U.S. Congress’ “Crypto Week” — could inject fresh volatility into global markets and present new opportunities.

    He warned that renewed uncertainty over global trade may intensify after former U.S. President Donald Trump threatened to impose 35% tariffs on the European Union and Mexico over the weekend.

    On the U.S. inflation outlook, Otunuga explained that any signs of rising consumer prices — with the market forecasting a CPI increase to 2.6% and core CPI to 2.9% — may weaken expectations of Federal Reserve interest rate cuts, potentially strengthening the dollar and tightening global financial conditions.

    Turning to Nigeria, the FXTM analyst said the country’s Consumer Price Index (CPI) for June, due for release on July 15, is expected to reflect continued cooling in inflationary pressures.

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    He projected that headline inflation may have declined to 21.4% year-on-year, down from 23% in May — marking the fourth consecutive monthly drop. He added that this trend could offer some relief to the Central Bank of Nigeria (CBN), which implemented a series of interest rate hikes throughout 2024 to curb inflation.

    However, Otunuga noted that the inflation slowdown is more of a technical correction, driven by recent gains in the naira, a weaker U.S. dollar, and increased non-oil exports.

    “While the decline in inflation is welcome news, it is largely supported by temporary factors rather than structural reforms,” he said.

    Otunuga said, “The CBN is scheduled to meet later this month and will most likely keep rates unchanged at 27.5 per cent.

    “One key challenge for the country will be how to re-tweak its budget for lower oil prices. Indeed, the budget was based around oil production at 2 million barrels and oil prices of $75. Brent is trading around $70, with the nation producing 1.544m b/d of crude in May, according to OPEC.

    “Nigeria is hoping to raise production to 1.9m b/d by the end of 2025. But its impact on the economy may be muted if oversupply and tepid demand keep oil prices subdued. Brent is up four per cent this month but still down over six per cent since the start of 2025.”