Financial market update

18 January 2013, Sweetcrude, Lagos – Local and international financial market update.
NIGERIA: Nigeria’s inflation rate fell to 12% in December as the effects of flooding that damaged agricultural output began to recede. Inflation in Africa’s largest oil producer slowed from 12.3 percent in November, the Abuja-based National Bureau of Statistics said yesterday in an e-mailed report. Prices rose 0.8 percent in the month. Core inflation, which excludes agricultural products, rose 13.7 percent in December from a year earlier, compared with 13.1 percent in the previous month, the second consecutive month in which the measure “deviated from the downward trend it exhibited” since July, the statistics bureau said.

EUROPE: The euro approached a 10-month high against the dollar after Spain’s borrowing costs fell at a 4.5 billion-euro ($6 billion) sale of bonds, underscoring increased confidence in European debt markets. The euro gained 0.7 percent to $1.3376 at 5 p.m. New York time. It touched $1.3404 on Jan. 14, the strongest level since Feb. 29.

INDIA: Prime Minister Manmohan Singh’s government yesterday allowed state-run refiners to fix diesel prices on their own for the first time in more than a decade, seeking to narrow an expanding subsidy bill and budget deficit. Refiners including Indian Oil are planning monthly increases in prices of the fuel, two people with direct knowledge of the matter said yesterday.

CHINA: China’s economic growth accelerated for the first time in two years as government efforts to revive demand drove a rebound in industrial output, retail sales and the housing market. Gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, the National Bureau of Statistics said in Beijing today.

Bonds – Volatile week as yields came off again yesterday in reaction to inflation slowing down. Market will likely sell early next week as the auction comes up and the increase issuance size rattles some market players.

Bills – Bullish session in the markets yesterday in reaction to the slowdown in inflation as well as an expectation by market that the asymmetric corridor might be tweaked next week making the Standing Deposit Facility less attractive as the CBN is rumored to be worried about their cost given the expected levels of liquidity in the market.

Money Market – OBB and unsecured O/N rates dipped about 200bps yesterday to close at 12.25% and 12.50%. A liquidity injection came from maturing OMO bills to the tune of N147billion.

Indicative Currency Exchange Rates
Bid           Offer

EURUSD     1.3394         1.3404
GBPUSD      1.5989         1.5999
USDJPY       90.01           90.41
USDCHF      0.9362         0.9382
GBPEUR       1.1937         1.1947
USDZAR       8.8516        8.9516
USDNGN      157.04        157.79
JPYNGN        1.7447        1.7947
CHFNGN       167.74        171.74
EURNGN       210.34      214.34
GBPNGN       251.09       255.09
ZARNGN       17.74           19.74

Oil traded near the highest price in four months in New York and headed for the longest weekly winning streak in 14 months after economic growth accelerated in China, the world’s second-biggest crude consumer. Crude for February delivery was at $95.64 a barrel, up 15 cents, in electronic trading on the New York Mercantile Exchange at 3:11 p.m. Singapore time.

Interest rates
NIBOR (%)                       LIBOR (%)

O/N              12.7500          USD 1 month             0.2047
7 Day            12.9583          USD 2 month             0.2500
30 Day          13.7083         USD 3 month             0.3020
60 Day          14.0000         USD 4 month            0.3541
90 Day          14.2917          USD 6 month             0.4865
USD 12 month           0.8100
Y/Y Consumer Inflation November 2012 :             12.3%
FX Reserves: 10 January 2013 (USD bn)               44.678
MPR                                                                               12.00%
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market
Dealers Association Standard Chartered Bank Nigeria

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