Financial market update

18 October 2011, Sweetcrude, Lagos- International News
. EUR – The euro rose but remained below a one-month high hit the previous day, having taken a hit after Germany tempered hopes that European leaders would soon come up with a quick, comprehensive solution to the euro zone’s debt crisis.

· CHF- an uptick in risk aversion lifted the Swiss Franc against the dollar after German officials tempered hopes a European Union Summit on Oct 23 would provide a “definitive solution” to the euro zone’s debt crisis.

· ZAR: South Africa’s rand softened against the dollar and was seen coming under pressure as investors steered clear of risky assets, disappointed by comments that European leaders are unlikely to come up with a quick solution to the debt crisis

Nigeria News
· Bonds –
Trading activity continues to be very patchy and volatile as the market tries to find new levels. The shocks which came from the CBN activity continues to make price discovery very difficult. The bond auctions come up on Wednesday and this will dictate the direction going forward.

· Bills – In continuous reaction to 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 CBN crediting the banks with stabilisation securities has also complicated things and added more volatility to the market.

· Money Market – OBB went up 200bps to close at 14.00% with unsecured rates also up about 150bps to 15.00% as liquidity thinned out at the end of last week on the back of CBN activity. Rates are expected to remain high over the week.

· NGN Foreign exchange – CBN offered $400mio in the auction yesterday. Total demanded and sold was $296.91. the lowest intervention rate was at $/NGN 151.4495 (inc. the 1% commission), 5 points appreciation against the previous auction.

Hi            Low             Close          Prev.Close
    164.95/05     160.95/05    162.85/95   164.60/70

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