Financial market update

14 October 2011, Sweetcrude, Lagos- International News
· EUR – The euro dipped but hovered above an intraday low hit after S&P cut Spain’s credit rating, and was on track for its biggest weekly rally since January after getting lifted by a flurry of short covering.

· CHF- The Swiss Franc followed the euro higher against the dollar after Slovakia’s parliament opened the way for a pan-euro zone plan to strengthen the rescue fund for the region’s ailing banks, boosting market sentiment on the single currency.

· ZAR: South Africa’s rand started Friday on a firmer note and looks set to end this week with its 2.5% gains intact after another volatile five days of trade.

Nigeria News
· Bonds –
A very patchy and volatile session as the market tries to find new levels on the back of the T-bill auction which where the 364 day bill closed at an effective yield of 19.35%. We might be set to see an inverted yield curve as the long end might resist the rise in yields. The bond auctions come up next Wednesday and this will dictate the direction on the long end..

· Bills – As a result of the spike in rates at the primary auction, secondary market trading was very thin yesterday. With the market still struggling to come to terms with the 275bp rate hike at the extra ordinary MPC meeting on Monday, the auction results have come in to add a lot more uncertainty and volatility

· Money Market – OBB closed at 14.00% with unsecured rates closing at 16.50-17.00% as liquidity remains very thin.

· NGN Foreign exchange – the reduction of bank’s Net Operating Position takes effect from today. Ticket size in the interbank market has been reduced from $500k to $250k.

Hi              Low            Close            Prev.Close
160.65/75     156.15/25    160.22/32        156.95/05

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