Financial market update

International News

· EUR: Euro falls more than 40pips after Moody’s rating agency says it placed Spain’s AA2 credit rating on review for possible downgrade, fuelling fears about the euro zone’s debt problems.

· USD: The dollar came under broad pressure on Friday, sinking to a four-month low against the yen while risk currencies faltered after the House of Representatives delayed a vote on a Republican proposal to raise the U.S. government’s debt limit, adding to uncertainty ahead of an August 2 deadline.

· CHF: The Swiss franc pushed towards record levels against the euro on Friday as ratings agency Moody’s said it may downgrade Spain’s debt and a spike in Italian borrowing costs added to euro zone debt concerns.

Nigeria News

· Bonds – A relatively flat session yesterday with no significant move across the yield curve, market seems to be resisting the expected correction on yields from the recent MPR hike, volatility expected in the coming week when we should start to see some gradual correction across the yield curve.

· Bills – Excess demand from Wednesday’s auction filtered into the secondary market activities yesterday as bills got bought across the various tenor brackets causing a 25-30bps dip in yields, cash markets remain liquid and as such sustaining this bullish move despite the recent hike in MPR.

· Money Market – Unsecured O/N rate dipped 25bps to 7.75%, market remains liquid with cash levels at NGN198bn.

· Interbank –
Hi Low Close Prev.Close
USD/NGN 153.28/38 152.67/77 153.17/27 152.80/90

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Financial market update
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