Financial market products & services update

*Financial markets.

*Financial markets.

08 December 2015, Sweetcrude, Houston – Local and international financial market products and services update.

NIGERIA: The Nigerian government proposed increasing spending next year without overstepping borrowing targets even as it budgets for a “conservative” benchmark oil price. Under a three-year economic plan approved by the cabinet, government expenditure will rise to 6 trillion naira ($30 billion), Budget and Planning Minister Udoma Udo Udoma told reporters on Monday in the capital, Abuja. In April, the Senate approved spending of 4.5 trillion naira for 2015 and lawmakers last week authorized an increase of 466 billion naira. While the budget next year will be “expansionist,” the assumed oil price will be just $38 a barrel because of “uncertainties” and the output target is set at 2.2 million barrels a day, said Udoma. The benchmark price in this year’s budget approved in April was $53 a barrel.

FX: The CB Special auction rate was 197 yesterday.

FIXED INCOME: It was a quiet start to the week for both Bonds and T-bills. Not much happened in terms of traded volumes, street pretty much slowing down as the year come to a close. Yields however trended lower following some price action. T-bills yields dropped by 38bps and average now at 4.04%, and Bond yields dropped by 46bps and average now at 10.01%. Bond auction on Wednesday would give clearer direction to the market, Money Market liquidity still about 1trn and O/N is 1%.

COMMODITIES: Oil traded near the lowest level in more than six years amid speculation a global glut will persist with OPEC having effectively abandoned its strategy of limiting output to control prices. Brent for January settlement was at $40.97 a barrel on the London-based ICE Futures Europe exchange, up 24 cents, at 4:51 p.m. Seoul time.

CHINA: China’s exports fell for a fifth month while a slump in imports moderated, as policy makers seek to spur domestic spending amid tepid global demand. Overseas shipments dropped 6.8 percent in November in dollar terms from a year earlier, the customs administration said Tuesday. That compared to the median forecast of a 5 percent decline in a survey of economists and the 6.9 percent fall in October. Imports declined for a record 13th straight month, dropping 8.7 percent in dollar terms versus an 18.8 percent slump in October, leaving a trade surplus of $54.1 billion. With sluggish trade combining with slowing residential construction, policy makers may need to keep their foot on the gas even after six interest rate cuts and expedited fiscal spending.

INDIA: India’s 10-year bonds dropped, pushing the yield to a one-week high, on speculation demand for debt is weakening ahead of a potential increase in U.S. interest rates this month. Overseas holdings of rupee notes fell 20.7 billion rupees ($310 million) in the last three days, National Securities Depository Ltd. data show. Primary dealers rescued a sale of sovereign bonds on Friday by picking up unsold debt, fueling speculation investors sought higher coupons after benchmark 10- year yields rose in November by the most since June. Futures contracts show a 78 percent chance the Federal Reserve will raise rates at its Dec. 15-16 meeting. The yield on Indian securities due May 2025 climbed three basis points to 7.78 percent as of 10:49 a.m. in Mumbai, set for its highest close since Nov. 30, according to prices from the Reserve Bank of India’s trading system.

Macro Economic Indicators
Inflation rate (Y-o-Y) for October. 2015              9.30%
Monetary Policy Rate current                               11.00%
FX Reserves (Bn $) as at December 4, 2015      29.746

Money Market Highlights

O/N                                 0.9517
30 Day                            9.5198
90 Day                           11.4512
180 Day                        13.3440
USD 1 Month               0.2870
USD 2 Months             0.3813
USD 3 Months             0.4770
USD 6 Months             0.7121
USD 12 Months           1.0402

Benchmark Yields
Tenor       Maturity       Yield (%)

91d              3-Mar-16         3.56
182d            2-Jun-16         5.95
364d           1-Dec-16          6.75
2y                27-Apr-17       9.82
3y                29-Jun-19      11.43
5y                13-Feb-20      11.79

Indicative Currency Exchange Rates
Bid       Offer

USDNGN          197.50     199.50
EURUSD          1.0766     1.0968
GBPUSD          1.4928     1.5130
USDJPY           123.04     123.07
USDCHF          0.99315   1.0033
GBPEUR          1.3729      1.3933
USDZAR          14.4406   14.6440

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