Financial market products & services update

Financial markets

Financial markets

25 June 2015 Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: CBN banned 41 items from accessing the FX markets with immediate effect in a bid to conserve FX reserves and aid domestic industries. The circular clarifies affected items are not banned from importation; they just cannot be financed with FX from the official markets. A press conference was called yesterday by the CBN. Details available on the CBN website
Markets is still waiting for clarity on how FX will be accessed for already established LC’s related to banned items.

FIXED INCOME: Despite softened demand in bonds following the recent FX circular, trading remained relatively upbeat in bills as yields declined average 9bps on optimism of the OMO maturity. Still no clarity yet on when the interbank FX market will be opened and this is causing the weak tone seen in the bond market. O/N rates inched higher to 18% on even tighter liquidity. Money market only long NGN18.77bn today but tomorrow’s maturity will give some support.

MONEY MARKET: O/N rates inched higher to 18% on even tighter liquidity. Money market only long NGN 18.77bn

COMMODITIES: Oil fell for the first time in three days after an Energy Information Administration report showed inventories of gasoline and distillate increased last week. Supplies of distillate fuels gained for a fifth week, while gasoline stockpiles rose for second week U.S refineries processed the most crude for this time of year since at least 1989.

US: The U.S. economy is on track to grow 2.0 percent in the second quarter following data that showed gains in new and existing home sales in May, Atlanta Federal Reserve’s GDP Now forecast model showed on Tuesday. This was up slightly from the regional Fed’s prior estimate on June 16 of a 1.9 percent rise. The gain of 5.1 percent in May existing home sales and a 2.2 percent May increase in new home sales helped raise the model’s forecast on residential investment growth to 10.0 percent from 7.0 percent in the second quarter, the Atlanta Fed stated.

EUROPE: Greek Prime minister is holding nonstop emergency talks with creditors as he struggles to break a five month impasse that has brought the country to the cusp of default.oil.

Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014                   9.00%
Monetary Policy Rate current                          13.00%
FX Reserve (Bn $) as at January 09 2015     29.033

Money Market Highlights
O/N                                 22.3750
30 Days                           16.0566
90 Days                           17.4151
180 Days                         18.2597

USD 1 Month                 0.18650
USD 2 Months               0.23425
USD 3 Months               0.28075
USD 6 Months               0.44680
USD 12 Months             0.77575

Benchmark Yields
Tenor     Maturity     Yield (%)
91d           24-Sep-15         10.50
182d         17-Dec-15         11.50
364d        02-Jun-16         12.50
2yr            27-Apr-17         13.00
3yr            29-Jun-19        13.50
5yr            13-Feb-20        13.75

Indicative Currency Exchange Rates
                          Bid        Offer
USDNG         196.00      199.40
EURUSD       1.1100       1.1200
GBPUSD       1.5600      1.5700
USDJPY        123.00      124.00
USDCHF       0.9380    0.9385
GBPEUR       1.4050      1.4100
USDZAR      12.1300    12.1350
JPYNGN      160.4997   160.6003
CHFNGN       213.02     214.71
EURNGN       222.96    224.32
GBPNGN        306.63   308.02
ZARNGN          15.09      17.01

About the Author