Financial market update

16 September, 2011, Sweetcrude, Lagos- International News
. EUR – the euro clung to gains on Thursday boosted by coordinated action from key central banks to add liquidity to the European banking system, although the rally is unlikely to last as the Greek crisis remains in a critical state.

. JPY: Japanese PM insists that government will take all steps possible and work with the Bank of Japan to respond to the negative effects of a strong yen. Excessive appreciation of the yen would adversely affect Japanese exporters and small and medium sized companies negatively.

. CHF: The Swiss franc shadowed the euro lower against the dollar in thin and tentative trading ahead of a meeting of European Union finance ministers in Poland which U.S Treasury Secretary Tim Geithner will also attend..

Nigeria News
. Bonds –
Post auction trading activity was very patchy with yields scattered across the curve. The 3yr is still being offered above the auction levels while the 5yr & 7yr are offered below. Some cautious trading due to the MPC next week as core inflation is still in double digits, some sentiment still calls for a hike though any hike will not likely be too aggressive

. Bills – selling on short end bills spread from the September to the October maturities. As interest rates remain high, players continue to try to unlock liquidity at the very short end. The rest of the curve is relatively stable and it is expected to remain so until after the MPC when we will see short end demand return.

. Money Market – OBB stable at 10.75% while unsecured O/N rates are averaging between 11.50 -12.00% with liquidity very thin and the market short about N136bio. The rates will likely remain high as the market funds for the FX and Bond auctions on Friday, however the FAAC funds should be in next week and will help boost liquidity.

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156.55/65 156.15/25 156.30/20 156.15/25

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