Financial market products & services update

*Financial markets.

*Financial markets.

11 December 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: There are strong indications that the Central Bank of Nigeria (CBN) is seriously considering discontinuing its twice-weekly dollar cash sales to bureau de change (BDC) operators as it seeks to sanitise the sub-sector. Nigeria’s foreign reserves stood at $29.597 billion on December 7, according to data on the central bank’s website. In place of cash, the central bank is considering introducing prepaid electronic cards that will stem the sale of cash by currency dealers to their customers, the source disclosed yesterday. The CBN last week suspended about 1,600 BDC operators from participating in its weekly forex auction. The regulator’s hammer fell on the currency dealers over their failure to render appropriate returns on the sale of dollars. The CBN recently warned banks and the forex dealers to ensure that they render proper returns on the dollars purchased from its official window or they would be sanctioned. Most of those affected were firms that gave false bank verification numbers (BVN) of their customers.

FX: The CB Special auction rate was 196.97 yesterday.

FIXED INCOME: Market slowing down as the holiday is drawing closer. Bond yields opened lower reacting to yesterday’s bond auction but only a handful of trades for most of the day. Bills followed same pattern with average yield down 20bps. Overall it was a very quiet day in both bonds and bills. O/N rates closed at 0.5%.

COMMODITIES: Oil edged higher from the lowest close in more than six years as investors weighed the significance of the first decline in U.S. inventories in 11 weeks. Futures rose as much as 1 percent in New York after closing 9.5 percent lower in the four days since OPEC’s Dec. 4 decision to effectively abandon its output target.

EUROPE: December is turning into a cruel month for traders counting on cuts in interest rates to drive down currencies. New Zealand’s dollar jumped the most since November after central bank chief Graeme Wheeler delivered the policy easing that economists had predicted without the promise of further reductions. That came less just a week after his European counterpart, Mario Draghi, sparked the euro’s biggest rally since 2009 by unveiling a smaller-than-anticipated stimulus package. The elephant in the room is the Federal Reserve. Its looming policy decision is making it trickier for speculators to predict the actions of other central banks and to work out where exchange rates are headed. As with the euro, strategists are now reassessing forecasts for the kiwi, becoming less certain how far it can extend this year’s 13 percent drop, which is already the steepest since 2008.

CHINA: China’s broadest measure of new credit rebounded in November, signaling government easing is helping spur demand for loans. Aggregate financing rose to 1.02 trillion yuan ($158 billion) in November, according to a report from the People’s Bank of China on Friday. That compared to the median forecast of 970 billion yuan in a Bloomberg survey.

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 7, 2015 29.597

Money Market Highlights

O/N 0.9900
30 Day 9.3684
90 Day 11.2983
180 Day 13.4191
USD 1 Month 0.2931
USD 2 Months 0.3900
USD 3 Months 0.4865
USD 6 Months 0.7211
USD 12 Months 1.0449

Benchmark Yields
Tenor Maturity Yield (%)

91d 3-Mar-16 2.96
182d 2-Jun-16 5.70
364d 1-Dec-16 6.77
2y 27-Apr-17 10.05
3y 29-Jun-19 11.27
5y 13-Feb-20 11.49

Indicative Currency Exchange Rates
Bid Offer

USDNGN 197.50 199.47
EURUSD 1.0830 1.1032
GBPUSD 1.4935 1.5137
USDJPY 122.72 122.75
USDCHF 0.98675 0.9969
GBPEUR 1.3654 1.3858
USDZAR 14.5233 14.7267

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