26 November 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: Nigerian President Muhammadu Buhari approved the creation of a waste-cutting unit within the finance ministry to bolster the government’s budget position and an economy battered by sliding oil prices, a person with knowledge of the matter said. The so-called efficiency group will be similar to the U.K.’s Efficiency and Reform Group and will aim mainly to curb overhead expenditure, such as travel and entertainment, across all departments of the federal government. The ERG sits under the cabinet office and tries to save money by pooling suppliers to the U.K. government and ensuring projects are within budget and completed on time.
FX: The CB maintained the Special auction rate at 197.00 yesterday.
FIXED INCOME: As anticipated, yields dropped sharply at market open yesterday for both T-bills and Bonds. It was more of price action as market quickly tried to re-price all assets lower following the MPC decision. Most of the bond activity was seen on Jul34s (total volume 33bn). At close, T-bills yields had dropped by 118bps while bond yields had dropped by 184bps. The average yields are now 2.73% and 9.19% for t-bills and Bonds respectively. Going forward we expect the market to gradually settle to this new levels. O/N remained at 1% with money market liquidity at NGN300bn, there’s an OMO bill maturity today of NGN162bn.
COMMODITIES: Oil halted three days of gains near $43 a barrel as expanding U.S. inventories countered signs drilling is slowing in the world’s biggest consumer. West Texas Intermediate for January delivery fell as much as 34 cents to $42.70 a barrel and was at $42.85 at 4:40 p.m.
Hong Kong time on the New York Mercantile Exchange.
INDIA: A gauge of expected swings in the rupee advanced to a one-week high amid signs demand for Indian assets is waning as the Federal Reserve prepares to raise interest rates. The currency’s three-month implied volatility, used to price options, rose seven basis points to 7.03 percent as of 10:35 a.m. in Mumbai, the highest since Nov. 20, data compiled by Bloomberg show. India’s currency has dropped 1.8 percent in November, the worst performance in Asia, as global funds withdrew $676 million from local shares. Foreign holdings of rupee-denominated bonds have fallen by 37.2 billion rupees ($560 million), the most since May, data compiled by Bloomberg show.
CHINA: China’s stocks fell for the first time in three days amid concern over the sustainability of the market’s rebound as the government pares support measures. The Shanghai Composite Index dropped 0.3 percent to 3,635.55 at the close, erasing a gain of as much as 0.6 percent in the last hour of trading. The Shanghai Composite has risen 24 percent from its August low. The market rebound has prompted authorities this month to relax some emergency measures imposed during a mid-year rout including resuming initial public offerings and scrapping a rule requiring brokerages to hold net-long positions.
Macro Economic Indicators
Inflation rate (Y-o-Y) for October. 2015 9.30%
Monetary Policy Rate current 13.00%
FX Reserves (Bn $) as at November 20, 2015 30.256
Money Market Highlights
30 Day 9.9951
90 Day 11.8784
180 Day 13.8911
USD 1 Month 0.2315
USD 2 Months 0.3180
USD 3 Months 0.4067
USD 6 Months 0.6486
USD 12 Months 0.9733
Tenor Maturity Yield (%)
91d 18-Feb-16 1.73
182d 26-May-16 4.11
364d 20-Oct-16 4.09
2y 27-Apr-17 6.96
3y 29-Jun-19 9.01
5y 13-Feb-20 9.87
Indicative Currency Exchange Rates
USDNGN 197.50 199.50
EURUSD 1.0508 1.071
GBPUSD 1.4976 1.5178
USDJPY 122.56 122.59
USDCHF 1.01815 1.0283
GBPEUR 1.4109 1.4313
USDZAR 14.1120 14.3154