08 October 2013, Sweetcrude, Lagos – Local and international financial market products and services update.
NIGERIA: According to the Debt Management Office, its domestic debt market initiative has helped increase the inflow of foreign exchange. The initiative has significantly reduced government’s cost of borrowing and further diversification of investor-base of FGN securities.
BONDS: The week started on a bullish trend with yields coming off across the curve. The bond auction comes up next week and we expect this to give some direction to the markets.
BILLS: Yields went up across the maturities yesterday ahead of the primary auction on Thursday which is expected to boost supply into the market. No OMO auction yesterday from the Central Bank
MONEY MARKET: OBB and ON stable at 10.75% and 11% respectively with market opening up yesterday at N300 billion.
CBN RDAS AUCTION: CBN offered $300 million and sold $231.1 million. Marginal rate was 155.73 (excluding CBN 1% commission). 20 Banks bid.
US: A few faint glimmers of hope surfaced on Monday in the U.S. fiscal standoff, both in Congress and at the White House, with President Obama saying he would accept a short-term increase in the nation’s borrowing authority to avoid a default. Separately, a Senate aide said Republican Senator Rob Portman was floating a plan to cut federal spending and reform the U.S. tax code as part of a broader deal to reopen shuttered government agencies and raise the government’s debt ceiling. While Portman’s initiative may or may not gain traction, most lawmakers believe that a budget deal like it will be necessary to end the stalemate.
EUROPE: Greece will emerge from six years of recession next year, a draft budget forecast on Monday, signaling that the country is past the worst of a crippling debt crisis that nearly broke Europe’s single currency. Twice bailed-out Athens also confirmed it would post a budget surplus before interest payments this year for the first time in over a decade. The positive outlook marks a sharp reversal in fortunes for a nation that had become Europe’s problem child, lurking from one crisis to the next as it tottered close to bankruptcy and exasperated its international partners with broken promises.
CHINA: Growth in China’s services industry slowed in September and optimism over the business outlook weakened, a private survey showed on Tuesday, indicating that the nascent recovery in the world’s No. 2 economy is likely to remain a slow one. The services industry, which has so far weathered the global slowdown much better than the factory sector, is an increasingly important pillar in China’s economy, especially as the government seeks to expand domestic consumption to drive growth. Services accounted for about 45 percent of the economy in 2012 and is the biggest employer in China.
COMMODITIES: WTI oil traded near the lowest level in almost a week before data forecast to show crude stockpiles rose in the U.S. where lawmakers remain deadlocked over extending the debt limit to avoid default. WTI for November delivery was at $102.94, down 9 cents, in electronic trading on the New York Mercantile Exchange. The contract slipped 8 cents to $103.03 yesterday, the lowest settlement since October 1.
Indicative Currency Exchange Rates
EURUSD 1.3561 1.3611
GBPUSD 1.6079 1.6129
USDJPY 97.13 97.53
USDCHF 0.9053 0.9083
GBPEUR 1.1857 1.1867
USDZAR 9.9835 10.1335
USDNGN 159.75 160.50
JPYNGN 1.6447 1.6947
CHFNGN 176.46 180.46
EURNGN 216.64 220.64
GBPNGN 256.86 260.86
ZARNGN 16.00 18.00
WTI oil traded near the lowest level in almost a week before data forecast to show crude stockpiles rose in the U.S. where lawmakers remain deadlocked over extending the debt limit to avoid default. WTI for November delivery was at $102.94, down 9 cents, in electronic trading on the New York Mercantile Exchange. The contract slipped 8 cents to $103.03 yesterday, the lowest settlement since October 1.
NIBOR (%) LIBOR (%)
O/N 11.3750 USD 1 month 0.1738
7 Day 11.8333 USD 2 month 0.2140
30 Day 13.1250 USD 3 month 0.2434
60 Day 13.4167 USD 6 month 0.3658
90 Day 13.7917 USD 12 month 0.6209
Y/Y Consumer Inflation August 2013 : 8.2%
FX Reserves: 02 October 2013 (USD bn) 45.388
Source: Reuters, Bloomberg, Central Bank of Nigeria, Financial Market Dealers Association Standard Chartered Bank Nigeria.