23 December 2015, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: President Muhammadu Buhari yesterday presented the N6.08 trillion 2016 budget estimates before a joint session of the National Assembly and disclosed that the Governor of the Central Bank of Nigeria had assured him that the central bank was “currently fine-tuning its foreign exchange management to introduce some flexibility and encourage additional inflow of foreign currency to help ease the pressure” on the naira.
The president’s hint of a review of the foreign exchange policy and possible devaluation of the naira saw the local currency strengthen against the dollar to N268 on the parallel market yesterday, from N271 at which it sold on Monday.
According to Buhari, the state of the Nigerian economy, which he said had been made more precarious by unbridled corruption and security challenges, was of utmost concern to many Nigerians.
FIXED INCOME: The T-bill market had a soft tone yesterday as the market made room for the T-bill primary auction holding today. Trading activities should remain soft pending when the release of the auction results.
The headlines from the President’s 2016 budget presentation led to more demand on the short end (April 2017s and June 2019s) as street digested the fact that borrowing may not be significantly higher in the coming year.
FX: The CBN daily auction closed for the year on Friday the 18th December 2015 and will resume January 4 2016.
COMMODITIES: Oil in New York extended gains and traded near parity to Brent before U.S. crude inventory and production data.
February futures climbed as much as 1.2% in New York after gaining 0.9% Tuesday. West Texas Intermediate this week rose to a premium over Brent for the first time since January on speculation the U.S. decision this month to end a 40-year ban on exports may ease the nation’s oversupply.
CHINA: The Yuan strengthened to a one-week high as China pledged to ease currency controls and started a trial of extended trading hours.
The nation will push forward with Yuan convertibility under the capital account, while preventing cross-border flow risks, the State Administration of Foreign Exchange said in a statement Tuesday. China has asked some banks to conduct a test run of a doubling of the onshore Yuan’s trading hours, according to people familiar with the matter, in a move that will provide a reference for global investors outside of Asia hours. The onshore Yuan gained 0.03% to 6.4766 a dollar as of 10:42 a.m. in Shanghai, according to China Foreign Exchange Trade System prices.
U.S: Consumer purchases climbed in November by the most in three months, indicating the biggest part of the U.S. economy was gaining momentum heading into the holiday shopping season.
Spending advanced 0.3%, matching the median forecast in a Bloomberg survey, to $12.43 trillion at an annualized rate, a Commerce Department report showed Tuesday. That followed no change the prior month.
The figure, which was to be made public Wednesday with the agency’s report on personal income and spending, was released early on the Bureau of Economic Analysis’ website. The only number issued ahead of time was the current value of household outlays.
Macro Economic Indicators
Inflation rate (Y-o-Y) for November 2015 9.37%
Monetary Policy Rate current 11.00%
FX Reserves (Bn $) as at December 17, 2015 29.375
Money Market Highlights
30 Day 8.8239
90 Day 10.6770
180 Day 12.5259
USD 1 Month 0.4195
USD 2 Months 0.50520
USD 3 Months 0.5931
USD 6 Months 0.8115
Tenor Maturity Yield (%)
91d 24-Mar-16 2.86
182d 16-Jun-16 6.18
364d 15-Dec-16 7.09
2y 31-Aug-17 8.19
3y 30-May-18 9.18
5y 13-Feb-20 11.11
Indicative Currency Exchange Rates
USDNGN 197.00 199.50
EURUSD 1.0833 1.1035
GBPUSD 1.4757 1.4959
USDJPY 120.93 120.96
USDCHF 0.98445 0.9945
GBPEUR 1.3486 1.3690
USDZAR 15.0615 15.2649