Aurelia Butler

NEW YORK (Reuters) – Strong corporate results have helped fuel the S&P 500’s climb to new highs this year, taking the focus away from the Federal Reserve’s tortuous path towards lower interest rates. As earnings season winds down, some investors believe monetary policy will jump back in the driver’s seat. Nvidia Corp (NASDAQ:NVDA)’s blockbuster earnings results put an exclamation point on the fourth-quarter reporting period, as the AI darling’s surging shares propelled the S&P 500 to fresh record highs in the past week. The benchmark index has gained over 6.7% so far this year.With the vast majority having reported, S&P 500 companies were on track to increase fourth-quarter earnings by 10% from the year-earlier period, according to LSEG IBES data, which would be the biggest rise since the first quarter of 2022.As the earnings glow fades in coming weeks, the spotlight could turn back to the macroeconomic picture. One pivotal factor could be the steady rise in bond yields, which has come on the heels of shrinking expectations for how much the Fed can ease monetary policy this year without reigniting inflation.”The market has been able to ignore the rise in yields because of the strong earnings,” said Angelo Kourkafas, senior investment strategist at Edward Jones. “That focus on the path of rates and yields might come back into the forefront as we move past earnings season.”Higher yields on Treasuries tend to pressure equity valuations as they increase the appeal of bonds over stocks while raising the cost of capital for companies and households. The benchmark 10-year Treasury yield, which moves inversely to bond prices, hit 4.35% earlier this week, its highest level since late November.While optimism on earnings and the economy has helped stocks shrug off the climb in yields, this could change if inflation data keeps coming in stickier than expected, forcing the Fed to further delay rate cuts. Futures tied to the Fed’s main policy rate on Friday showed investors pricing in around 80 basis points of Fed cuts this year, compared to 150 basis points they had priced in early January.An inflation test arrives Thursday, with the release of January’s personal consumption expenditures price index, which the Fed tracks for its inflation targets. On a monthly basis, the PCE index is expected to increase 0.3%, according to a Reuters poll of economists, up from a 0.2% rise the prior month.”If inflation renews its downward trend, that is going to be helpful to interest rates and that can provide the next catalyst for an up move” in stocks, said Chuck Carlson, chief executive officer at Horizon Investment Services.At the same time, many investors believe AI fervor will continue driving stocks for the foreseeable future. Nvidia touched $2 trillion in market value for the first time on Friday, riding on an insatiable demand for its chips that made the Silicon Valley firm the pioneer of the generative artificial intelligence boom.“We believe retaining strategic exposure to the US large-cap technology sector is important, and the rise in tech stocks could go further still,” wrote analysts at UBS Global Wealth Management on Friday, adding that they believe generative AI “will prove to be the growth theme of the decade.”Next week will also bring other data including on consumer confidence and durable goods that will give a broader look into the state of the economy. A number of the companies due to report results in the coming week, including Lowe’s (NYSE:LOW) and Best Buy (NYSE:BBY), are retailers who will give insight into consumer spending.Jack Ablin, chief investment officer at Cresset Capital, is among the investors who see benefits if the economy continues walking a fine line to a so-called “soft landing,” in which the Fed is able to cool inflation without upending growth. “If we can get slowing growth, slowing inflation, create an environment that the Fed can start reducing interest rates… that should help the average stock,” he said. More

BEIJING (Reuters) -China’s new home prices slowed their month-on-month declines in January with the biggest cities seeing some stabilisation, but the nationwide downward trend persisted despite Beijing’s efforts to revive demand.New home prices fell 0.3% month-on-month in January after dipping 0.4% in December, according to Reuters calculations based on National Bureau of Statistics (NBS) data on Friday.China has been ramping up measures to arrest a property downturn, including ordering state banks to boost lending to residential projects under a “whitelist” mechanism. More big cities including Shanghai have also eased purchase curbs to lure homebuyers.Last month, home prices in tier-one cities fell 0.3% on month, smaller than their 0.4% decline in December, partly due to additional support measures including a reduction in down-payments. Among 70 cities surveyed by NBS, Shanghai saw the biggest month-on-month increase with a rise of 0.4%, while the remaining three tier-one cities – Beijing, Guangzhou and Shenzhen – posted smaller home prices declines than most tier-two and tier-three centres.The number of cities that saw monthly price falls in January also decreased, but the overall market remained on a clear downtrend with buyer sentiment still very weak.From a year earlier, home prices fell 0.7%, marking the sharpest drop in 10 months. That was despite a low statistical base in January 2023 when prices dropped 1.5% year-on-year due to COVID-19 disruptions.Nie Wen, an economist at Hwabao Trust, said home price declines could persist.”It may take more than a year for the entire property market to fully recover and rebound,” Nie said. Central bank data released on Feb. 9 showed household loans, mostly mortgages, climbed to 980.1 billion yuan in January, far more than 222.1 billion yuan in December.However, Nie said people are not using such loans to buy homes, but rather for personal consumption.Residents will invest in the medium to long term, including buying property, only when their income expectations improve, he added.The property market has struggled to stabilise having languished since 2021 due to a series of defaults among overleveraged developers.As a result, policymakers have continued to roll out measures to boost market confidence.The country’s central bank on Tuesday announced its biggest ever reduction in the benchmark mortgage rate, although analysts believe its impact on home price will be limited given existing mortgage holders will not benefit until next year.”It will take some time for homebuyers’ incomes and confidence, and overall demand to recover in the property sector, which is still in the process of gradually bottoming out,” said Zhang Dawei, an analyst at property agency Centaline. More

“My overall view of the economy basically hasn’t changed based on one month of data,” Williams said in an interview that was conducted on Thursday and published on Friday, noting that inflation’s progress toward the Fed’s 2% goal can be “a little bit bumpy,” but that overall it and the economy more broadly are headed “in the right direction.” “At some point, I think it will be appropriate to pull back on restrictive monetary policy, likely later this year,” Williams said, remarks that are in synch with those of other Fed policymakers who have been sounding somewhat cautious lately about starting to cut rates without more confidence on inflation’s downward trajectory. As vice chair of the Fed’s rate-setting Federal Open Market Committee, Williams is an influential voice at the U.S. central bank, which has held its benchmark overnight interest rate steady in the 5.25%-5.50% range since last July. He did not give any sense of his preferred timing for the start of rate cuts, nor of exactly what would trigger them, apart from an overall assessment that inflation is indeed headed sustainably toward the 2% target. “It’s really about reading that data and looking for consistent signs that inflation is not only coming down, but is moving towards that 2% longer-run goal,” he told Axios. “I don’t think there’s any formula, or one indicator, or something that will tell you that. It’s really looking at all the information together, including these signs in the labor market and others and extracting the signal.”While a material significant change in the economic outlook could require a rethink, he said, “rate hikes are not my base case,” Axios cited him as saying. BALANCE SHEETFed policymakers are expected to start in-depth discussions next month about slowing the central bank’s ongoing reductions to its $7.63 trillion balance sheet. The goal, Williams said, “is to make sure that we get a nice, smooth process of continuing to reduce the balance sheet down to the ultimate level that we want to get to and allowing us to monitor and analyze and understand how that reduction in the balance sheet is meeting that test that we set out for ultimately stopping.” In other words, he said, slowing the balance sheet reductions will give the Fed time to assess where and when it ought to stop altogether, and help it avoid the kind of market disruptions that occurred when it was trimming its balance sheet in September 2019. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.By the end of this century, almost every country in the world could have a shrinking population. Although people are living longer due to advances in healthcare and a decline in poverty, they are also having fewer babies. Over the past 50 years, the global fertility rate — the total number of births per woman — has roughly halved to 2.3. In most advanced economies it is already well below the replacement rate of 2.1, where the population replaces itself from one generation to the next, taking into account mortality. Developing nations are on a similar downward trajectory. The upshot is a decline in the working-age population across the developed world, which will bring significant social, economic and political costs if left unaddressed. Some blame a dystopian outlook among millennials and Gen Z — from the harms their children may cause to the climate, to the harms the climate may also do to them. But while a child-free life has gained appeal among some youngsters, for multiple reasons, the vast majority of under-30s in America who do not have kids still want them.Rather, the long-term drop in the fertility rate is mostly the result of positive socio-economic trends. First, global female labour force participation and education levels have risen over the past half century. This has led to fewer children, or having them later in life. Second, economic development, better welfare systems and lower childhood mortality have reduced the need to have several children to support financial security. In the developing world, fertility rates are still above the “wanted rate” — an estimate of what the fertility rate would be if all unwanted births were avoided — according to data compiled by the World Bank. But, in advanced economies couples tend to have fewer children than they want. This is because the hurdles to bringing up children have also risen.Richer and higher-skilled economies come with more parenting costs, as childcare and education requirements tend to be higher. The opportunity costs of looking after kids, in lost earnings or leisure time, are also greater. But in advanced economies today, disposable incomes available to raise children have also been squeezed by rising living costs and sluggish wage growth. House prices have soared, and childcare support has often not kept up either. In the UK, some estimates put the cost of raising a child to 18 above £200,000. The average price of a first home in Britain is currently around £244,000.The impact of falling birth rates should not be taken lightly. The burden of healthcare and pension spending for older populations will fall on a shrinking workforce. That may lead to higher taxes. Public finances will come under even greater pressure too. Fewer youngsters in the labour market could also limit innovation and productivity growth. Populists push “pronatalist” policies, including tax breaks to have kids, as a solution. Not only do they warp women’s choices, there is little evidence that they work. Governments and businesses should instead do more to reduce barriers to those who do want children, particularly by making child-rearing a better deal for working parents. This includes boosting childcare support, removing disincentives to work in the tax system and improving parental leave entitlements. Yet, even Nordic nations with family-friendly policies are experiencing low birth rates.The economic and social forces behind declining births are unlikely to be reversed in the long term. Studies suggest environmental factors may also be affecting fertility. Immigration could be a solution, but the politics remains difficult, and it is only a short-term option to propping up workforces with developing countries set to age too. Ultimately, the rich world will have to get used to having fewer youngsters around. That means older workers, AI and automation will have to pick up the slack. More

This article is an on-site version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesPrime Minister Benjamin Netanyahu unveiled Israel’s plans for Gaza after hostilities end in the enclave with a formal proposal that directly contradicts the objectives of the US. The one-page document makes no mention of any role for the Palestinian Authority, the West Bank-based rival to Hamas that the Biden administration wants to see take over control, and rejects international steps towards recognition of a Palestinian state.The US issued more than 500 new sanctions on Russia in response to the death of opposition activist Alexei Navalny and on the eve of the two-year anniversary of the full-scale invasion of Ukraine. Some are concerned that EU sanctions have not been enforced strongly enough.A McKinsey-led think-tank advised China on policy that fed tensions with the US, including how to deepen co-operation between business and the military and push foreign companies out of sensitive industries.For up-to-the-minute news updates, visit our live blogGood evening.What a week that was! Stock markets across the world hit record highs over the last few days after bumper results from Nvidia turbocharged tech stocks and sparked a wider rally.The US chip company on Wednesday reported a 265 per cent jump in quarterly revenues and said even stronger sales were on the way thanks to the spending frenzy on artificial intelligence. “Accelerated computing and generative AI have hit the tipping point,” said Nvidia’s founder and chief executive Jensen Huang. “Demand is surging worldwide across companies, industries and nations.”The company, which has become a proxy for AI demand, makes the chips that have become the industry standard for crunching data for the large language models used in generative AI, powering chatbots and other software that can produce information in the form of text, images and video.The results sent Nvidia’s shares surging, propelling it above Amazon and Google’s parent Alphabet to become the third most valuable US-listed company behind Microsoft and Apple. The surge continued today as its market capitalisation passed the $2tn level. The boost from its earnings helped push the S&P 500 index and the tech-heavy Nasdaq Composite to new highs.The ripples spread far beyond the US. Chip fever also helped the Nikkei 225, Japan’s main stock market index, hit an all-time high, beating the previous record set during the 1980s asset bubble, while the Stoxx Europe 600, the region’s main index, also reached new heights.Tech fever aside, the rallies have also underlined another common theme in global markets: the growing influence of a small group of companies in propelling the wider market forward. The US has its “Magnificent Seven” tech stocks, Japan has its “Seven Samurai” and Europe has the “Granolas”: GSK, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L’Oréal, LVMH, AstraZeneca, SAP and Sanofi. (Nicknames courtesy of Goldman Sachs.)Back in the world of computer chips, Nvidia’s earnings show the strength of spending on infrastructure by companies and countries determined not to be left behind while AI is still in development, says the Lex column (for Premium subscribers). For now, the company looks untouchable but the landscape could change once the three big cloud companies — Microsoft, Amazon and Google — ramp up use of their own chips and rivals, such as AMD, catch up with Nvidia’s advanced technology. A contender from Europe, Besi, is also coming up on the rails. Meanwhile Open AI, the Microsoft-backed start-up that has become one of the fastest-growing companies in history, is looking to secure its own pipeline of semiconductors to lower its costs and reduce its dependence on Nvidia. Geopolitical concerns are also driving activity in the sector, especially in the US. Intel this week announced it would make high-end semiconductors for Microsoft in an attempt to compete with Taiwan’s TSMC and South Korea’s Samsung and “rebuild western manufacturing at scale”.Need to know: UK and Europe economyThe UK’s household energy price cap will fall 12 per cent in April to £1,690 a year, following a drop in wholesale gas and electricity prices. The fall will help the government’s efforts to fight inflation but prices remain well above typical levels before the energy crisis that began in the winter of 2021.UK business activity expanded more than expected in February, raising hopes that Britain’s recession could already be over, according to new S&P Global PMI survey data, a measure of the health of the private sector. Consumer confidence fell in February but Prime Minister Rishi Sunak said today that the public was beginning to see the “green shoots” of economic recovery.The PMI data was also encouraging for the eurozone, suggesting the economic downturn was easing, although German business activity remains in the doldrums, a trend underlined in this morning’s Ifo survey of business confidence. Germany’s ruling coalition is split over how best to resolve the economic gloom.The European Central Bank made its first loss since 2004 thanks to the impact of higher interest costs. The €1.3bn annual deficit will be offset against future profits for the first time in its history. Germany’s Bundesbank also has a deficit problem, burning through more than €20bn to cover huge losses.European capitals are racing to find $1.5bn in emergency military funding for Ukraine to compensate for the congressional deadlock on US aid and delays in European production. Need to know: Global economyChina’s Communist party sharpened its rhetoric towards Taiwan, increasing the pressure on newly elected president Lai Ching-te as he prepares to take office. A senior official said Beijing “must resolutely fight ‘Taiwan independence’ separatism”.Financial markets finally seem to be falling into line with the Federal Reserve’s outlook for US interest rates, as investors dial back their expectations on extensive cuts this year. Minutes from the last Fed policy meeting revealed policymakers remained “highly attentive” to the risk of resurgent inflation.Is it still the economy, stupid? Commentator Martin Sandbu tries to unpick why the US president is failing to get recognised for the success of “Bidenomics”. Is it because people “dare not believe that the all-too-rare case of an ultimate establishment figure belatedly committed to radical reform can be for real?” S&P upgraded its forecast for US gross domestic product.The UN shipping chief warned that ships diverted from the Red Sea and Suez Canal were at risk from hijackings. The disruption to trade has highlighted the fragility of globalisation and the smooth production and transport of consumer goods from the global south to Europe and the US, writes columnist John Gapper. Pakistan’s traditional parties have unveiled a new coalition government, breaking a two-week impasse following elections, but the administration will be quickly tested by the country’s dire economic circumstances: here’s our overview in charts.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Need to know: businessFood industry groups warned that UK plans to use “not for EU” labelling on meat and dairy products would raise costs and deter investment in domestic production. Google paused its latest artificial intelligence model, Gemini, from generating images of people over concerns at its depiction of different ethnicities and genders. Some users had complained that overcorrection towards creating images of women and people of colour had led to historical inaccuracies.Thousands of Iranians were caught out by a cut-price Apple iPhone scam after a company used celebrities to sell the coveted items supposedly at half-price but which never materialised. Europe’s defence industry is booming thanks to war in Ukraine and tensions in the Middle East and elsewhere. Global defence spending hit a record $2.2tn last year, while in Europe it rose to $388bn, levels not seen since the cold war. Here are the companies benefiting from the new environment. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Science round upA commercial space flight successfully landed on the Moon for the first time, heralding a new era of private lunar exploration. The US-based Intuitive Machines’ unmanned Odysseus lander was paid $118mn by Nasa to carry six scientific payloads, including instruments to observe space weather and a radio beacon to aid navigation. Architects and engineers meanwhile are starting to imagine what a manned lunar base might look like.An antiviral protein has been found to be an important indicator of long Covid, raising hopes of a possible therapy for sufferers who report extreme fatigue.Scientists have discovered a new form of magnetism that could lead to more energy-efficient computing. With data centres thought to account for about 1 per cent of global electricity consumption, even a modest improvement could have a large environmental impact, writes Anjana Ahuja.  Geologists are getting excited about prospects for “gold hydrogen”: hydrogen generated naturally within Earth, a much cleaner and cheaper variety than existing “blue” or “green” variants. The UK must be more strategic in how it funds science, according to John Bell, the former government adviser and head of a new research institute, as ministers pursue their goal of making the country a “science superpower” by 2030. The Cancer Research charity warned the UK was missing out on a “golden age” of drug discovery.Some good newsA British food company has opened what it says is the world’s most advanced vertical farm, using 100 per cent renewable energy to grow crops.Tomatoes growing under LED light at an earlier Jones Food Company facility near Scunthorpe. More

(Reuters) – The spreads between both investment-grade and junk-rated corporate bond yields and U.S. Treasuries have fallen to their narrowest level in more than two years, in a sign of overall investor confidence growing.The spread on the ICE BofA U.S. Corporate Index, a commonly used benchmark for high-grade debt, declined to 93 basis points on Thursday, its lowest since November 2021.On the ICE BofA U.S. High Yield Index, a commonly used benchmark for junk bonds, the option adjusted spread dipped to 322 basis points, its lowest since January 2022.These spreads reflect how much extra yield investors demand to hold corporate bonds over Treasury notes and bonds, which are considered the safest financial instruments because there is a near-zero chance of default by the U.S. government.”The additional premium you get over risk-free securities is very slim,” said Anthony Woodside (OTC:WOPEY), head of U.S. fixed income strategy at LGIMA. But, he added, “investors are looking at all-in yields.”Spreads are seen as gauge of market confidence. Strong demand for junk bonds in particular is seen as an optimistic signal, with narrowing spreads indicating investors see financial conditions as healthy and are less worried about corporate default.The junk spread surged to over 1,000 bp in March 2020 as the onset of the COVID-19 pandemic fanned market panic.The High Yield Index itself is near a record high set early this month. Meanwhile, the ICE BofA U.S. Investment Grade corporate bond index fell to a two-month low last week.Market optimism has been driven by a record-breaking Wall Street rally and a surprisingly resilient economy which have lifted Treasury yields this year.In the week to Wednesday, as the S&P 500 hit record highs, investors put $15.2 billion into bonds, including $10.2 billion into investment-grade bond funds, which logged a 16th straight week of inflows, the longest such stretch since October 2021, Bank of America Global Research said on Friday. More

ORLANDO, Florida (Reuters) – “The stock market is not the economy.”    This truism has rarely been more relevant, as the extraordinary boom in a handful of mega tech stocks revs Wall Street up to new all-time highs even as many sectors lag behind and economic growth seems set to decelerate.But at least the United States is still tracking ‘real’ inflation-adjusted economic growth rates of 3% or more – putting nominal growth at well over 5% while annual S&P 500 corporate profit growth through last year topped 10%.    Some excuse then.    But it’s a much bigger puzzle elsewhere. Japan has just recorded a technical recession and Europe’s economy has barely grown at all over the past two years, yet the Nikkei 225 and Stoxx 600 this week smashed their way to the highest levels on record too.Whenever stocks break into rarified territory comparisons with previous peaks are drawn, questions over the durability of the rally mount, and bubbles talk percolates.Such consternation is more acute if the good times on Wall Street are not replicated on Main Street. Yes, U.S. unemployment is historically low and growth was surprisingly strong last year, but few think either will be sustained. Luckily for equity investors, the market seems to have a momentum of its own beyond the ‘real economy.'”A better correlation for markets than the macro picture is how corporate earnings are trending. And they are trending quite healthy,” notes Justin Burgin, director of equity research at Ameriprise Financial (NYSE:AMP). BUFFETT INDICATOROften in such times, metrics like the ‘Buffett Indicator’ are used to highlight the risk that stock prices are poised to come tumbling down from their lofty peaks.This is the eponymous index used by veteran investor Warren Buffett, a ratio of equity market cap relative to gross domestic product, which indicates whether stocks are over- or under-valued. Depending on the market measure used, it shows that the total value of U.S. stocks is currently between one and a half times to nearly twice as high as annual GDP. That’s historically very high.The index is not without its flaws. It sets the value of all goods and services produced in the economy over a year against an equity market cap on any given day – essentially a ‘stock versus flow’ comparison. It doesn’t account for 15 years and trillions of dollars worth of central bank monetary largesse that have juiced asset prices far more than economic activity.However, according to a 2022 paper by Laurens Swinkels, associate professor at Erasmus University in Rotterdam, and Thomas Umlauft at the University of Vienna, it is a “crude, but straight-forward” way of measuring investor sentiment towards stock markets over the ‘real’ economy.Swinkels, who is also executive director of research at Robeco, and Umlauft make the simple point that as more economic resources are deployed in capital markets, “equity prices are being driven up without a commensurate increase in ‘real’ economic activity, and expected returns fall.”But it can be years, up to a decade, before stretched valuations lead to “substantial” losses, they add.”The Buffett Indicator and others are saying you should be concerned at this point in the cycle, although it doesn’t tell you what’s going to happen over the next 6-12 months,” notes Colin Graham, a colleague of Swinkels at Robeco.SWEET SPOTRight now, equities appear to be in a sweet spot – the consensus U.S. 2024 earnings growth forecast is tracking 10%, and America is the unrivaled global tech and artificial intelligence leader. U.S. valuations on aggregate may be high, but are nowhere near the peaks of 1999-2000 or even three years ago. The interest rate horizon is favorable – the next move will likely be lower – and corporate and household balance sheets are in relatively good shape.Valuations are much lower in Europe and still relatively cheap in Japan, where real interest rates will remain deeply negative even after the Bank of Japan ends its ultra-loose policy. What’s more, corporate Japan is also getting a huge boost from the weakest exchange rate and loosest financial conditions in over 30 years. Little wonder so many investors are so bullish on Japan even though the economy is in technical recession.”Our biggest long in equities is Japan,” says Tom Becker, a portfolio manager on the Global Tactical Asset Allocation team in BlackRock (NYSE:BLK)’s Multi-Asset Strategies & Solutions group. “We like the structural story: Japan getting out of the debt/deflation trap, the weak yen is good for earnings, and corporates can raise margins again,” Becker adds.Persistently higher interest rates and bond yields, a sharp rise in unemployment, or a financial shock could quickly turn things sour. But for now, the sweet spot for equities across the developed world looks like it can persist. (The opinions expressed here are those of the author, a columnist for Reuters.) (By Jamie McGeever; Editing by Andrea Ricci) More

JOHANNESBURG (Reuters) – Nigeria is set for two aggressive interest rate hikes within a little over a month to subdue inflation and boost the naira after a couple of missed monetary policy meetings, a Reuters poll found on Friday.A survey taken in the past week suggests that Nigeria’s monetary policy rate will be hiked 225 basis points to 21.00% on Feb. 27, in Governor Olayemi Cardoso’s first monetary policy meeting since he took office a couple of months ago.There was no clear majority in the sample of 15 analysts, with one expecting a 50 bps hike to 19.25% and one a 1,000 bps increase to 28.75%. That sets the stage for Cardoso to possibly act aggressively, though some doubt authorities have the appetite.”We expect significant policy tightening and the announcement of de facto system-wide tightening measures,” wrote Razia Khan at Standard Chartered (OTC:SCBFF). “We think both steps are needed to attract greater foreign portfolio investment and anchor inflation expectations,” she added.A 175 bps jump to 22.75% is expected in March.Consumer inflation in Africa’s biggest economy quickened for the 13th straight month in January to 29.90%, raising the cost of living to unbearable levels for many in the continent’s most populous nation.The Central Bank of Nigeria (CBN) has not had a policy meeting since July, putting it out of kilter with the rest of the continent’s key central banks that hold meetings almost every second month.”Reassuringly, the CBN has announced that it will hold its first two MPC meetings of the year in quick succession, on February 27 and March 26,” wrote analysts at Barclays. “This suggests to us that it is aware it is well behind the policy curve, and will need to deliver at least two strong doses of policy tightening.”The naira fell to its weakest level at 1,680.5 per dollar on Wednesday in the official spot market amidst a chronic shortage of the U.S. currency.David Omojomolo, Africa economist at Capital Economics, wrote that the latest devaluation may be enough to put the balance of payments on a stable footing, though as things stand the currency has continued to weaken on the parallel market.A poll last month suggested economic growth in Nigeria would be 3.0% this year and 3.7% next. “Nigeria needs to take a leaf out of Kenya or Zambia’s book – and ‘tighten’ monetary policy with rate hikes,” said Charlie Robertson, head of macro strategy at FIM Partners.Stabilising the naira is probably the most pro-growth move the CBN could make, so interest rate hikes would benefit Nigeria more than harm it, he added. More