Financial market products & services update

*Financial markets.

*Financial markets.

03 November 2015, Sweetcrude, Houston – Local and international financial market products and services update.
FX: The CB depreciated the Special auction rate to 197.00 yesterday.

FIXED INCOME: Market had mixed reactions yesterday, T-bills still sold off, an aftermath of the previous day’s OMO auction. Counterparties were shedding more positions, anticipating more OMO auction from CBN. Bonds however reacted in anticipation of next week’s auction, DMO did not increase amount on offer (30bn of 2020s and 20bn of 2024s), and so market traded sideways with pockets of buy interest. Average yield now 3.52% for T-bill and 10.50% for bonds. Nothing has changed in the money market space and result of the primary auction is still being awaited.

COMMODITIES: Oil extended gains after a report that Saudi Arabia is set to propose an eventual 1 million barrel a day cut to OPEC production. The Saudi proposal would require countries inside and outside the group — including Russia, Iran and Mexico — to also cut production and wouldn’t take effect until at least 2016, according to a report from Energy Intelligence. Brent rose by 58 cents to $43.07/bbl.

NIGERIA: The Nigerian Communications Commission cut the fine imposed on MTN Group Ltd., Africa’s biggest mobile-phone operator, to $3.4 billion from $5.2 billion, payable by the end of this month. “MTN has received a formal letter dated December 2, 2015 from the NCC informing the company that, after considering the company’s request, it has taken the decision to reduce the fine,” the Johannesburg-based company said in a statement Thursday. The Nigerian regulator imposed the original levy on MTN in October for failing to meet a deadline to disconnect 5.1 million unregistered subscribers. The company’s shares have lost 23 percent of their value since the fine was made public on Oct. 26.

CHINA: ADB Raises China 2015 GDP Growth Forecast as Economy Resilient. China’s economy will grow 6.9% in 2015, compared with a September estimate of 6.8%, ADB forecasts in its Asian Development Outlook Supplement. Despite ongoing housing overhang, excess industrial capacity, China’s economy remained resilient, supported primarily by private consumption, services. Central bank and government measures to stabilize China’s economy is bolstering small and medium-sized enterprises and providing some comfort.

U.S.: Federal Reserve policy makers may need to have more than just confidence that inflation will pick up to raise interest rates again after liftoff. Chair Janet Yellen on Wednesday suggested that the pace of future rate increases could depend on “actual progress” in price gains toward the central bank’s target. That’s a shift from the requirement the Federal Open Market Committee set for an initial move, to be “reasonably confident” that inflation would move back to its goal over the medium term. The language adds to reasons to expect that rates will rise gradually after a widely-anticipated liftoff later this month.

Macro Economic Indicators
Inflation rate (Y-o-Y) for October. 2015                     9.30%
Monetary Policy Rate current                                     11.00%
FX Reserves (Bn $) as at November 30, 2015         29.881

Money Market Highlights
O/N                                0.9600
30 Day                           9.0386
90 Day                          10.7641
180 Day                        12.6094
USD 1 Month              0.2510
USD 2 Months            0.3374
USD 3 Months            0.4360
USD 6 Months            0.6695
USD 12 Months          0.9896

Benchmark Yields
Tenor         Maturity         Yield (%)
91d                3-Mar-16            4.02
182d              2-Jun-16            5.13
364d             20-Oct-16           5.67
2y                  27-Apr-17           8.13
3y                  29-Jun-19          11.28
5y                  13-Feb-20          11.58

Indicative Currency Exchange Rates
                             Bid         Offer
USDNGN        196.00        199.50
EURUSD        1.0488         1.069
GBPUSD        1.4823         1.5025
USDJPY         123.42         123.45
USDCHF       1.01555        1.0257
GBPEUR       1.3992         1.4196
USDZAR      14.2392       14.4426

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