Financial market update

International News
· USD:
The dollar edged up against the Australian dollar on Wednesday but its bounce was limited after the U.S. Federal Reserve vowed to keep rates near zero for two years, reaffirming the greenback’s status as a funding currency of choice for carry trades.

· ZAR: The Rand fell over 1 percent against the dollar in early trade on Wednesday, but had recovered some of the previous session’s heavy losses as emerging market currencies suffered under a way of risk aversion.

· AUD/NZD: The Australian and New Zealand dollars held on to their spectacular overnight gains on Wednesday, underpinned a pledge by U.S. policy makers to keep rates low out to mid-2013 and surprisingly buoyant trade data from China.

Nigeria News
· Bonds –
A bearish market yesterday with some light selling sending yields up across the whole curve. As liquidity thins out and the auction approaches next week we expect a lot of volatility in the run up to the auction and will look to today’s bill auction as a pointer to direction of yields.

· Bills – The market opened bullish but an hour in, the profit takers came in and in the process pushed rates up an average 15-20bps above the open especially on the longer dated maturities. The shorter dated maturities are relatively more stable with not much movement in that bracket. $39.27m, $40m & $40m is on offer at the 91, 182 & 364days bill auction respectively.

· Money Market – Unsecured O/N rates went up 100bps to 8.25% the liquidity is thinning out as demand for FX reduces the naira liquidity.

· Interbank/WDAS – $250m is on offer at today’s WDAS auction.
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152.70/80 152.30/40 152.65/75 152.20/30

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