Financial market products & services update

*Financial markets.

*Financial markets.

31 December 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: The United States, US, government has restated its commitment to help Nigeria and its neighbours to counter terrorism acts by Boko Haram. A statement issued by the US Embassy in Abuja, yesterday, however, said that much still needed to be done to ensure that the people of Nigeria and its neighbours lived in peace. “The United States remains committed to helping Nigeria and its neighbours counter Boko Haram’s senseless acts of terror. “Despite much progress over the past year — due in large part to newly bolstered Nigerian and regional efforts — more work remains to ensure the people of Cameroon, Chad, Niger and Nigeria can live in peace. “The conflict has affected the lives of communities across the Lake Chad Basin region with some 2.5 million internally displaced people and more than 170,000 Nigerian refugees forced to flee their homes,” the statement said.

FIXED INCOME: A shorter tenured bill was auctioned yesterday via OMOs hence the reason why the stop rate come in lower. N61.95bn was sold at 7.77% yield for 183day bill vs. yesterday’s 8.62% for a 310 DTM bill (N138.79bn sold). Same trend continued in secondary market. T-Bill yields moved higher by 27bps because of the OMO auction. Bond yields were firm for most of the day but shortly before close of trading, we saw some profit taking. Average yield on bills now 5.28% and bonds 10.69%.

COMMODITIES: Oil headed for a second annual decline as a record pace of expansion in U.S. crude stockpiles exacerbates a global glut.

Futures have lost 31 percent this year and are set for the first back-to-back loss since 1998. Inventories increased by more than 101 million barrels, or more than 25%, over the year, the biggest expansion in weekly Energy Information Administration data going back to 1983.

JAPAN: The yen headed for a record fourth annual decline against the dollar as the divergence between U.S. and Japanese monetary policy showed no sign of ending.

A combination of Bank of Japan stimulus and higher Federal Reserve interest rates will send the Japanese currency down another 4 percent next year, according to the median estimate in a Bloomberg survey. A gauge of the dollar is poised for a third year of gains after the U.S. central bank on Dec. 16 raised its benchmark rate for the first time since 2006.

CHINA: China has a message for currency speculators: the free lunch is over.

The People’s Bank of China has suspended at least two foreign banks from conducting some cross-border Yuan business until late March, according to people with direct knowledge of the matter. The clampdown comes as the growing offshore-onshore spread makes it profitable for those who skirt capital controls to buy the currency at a discount in Hong Kong and sell it in Shanghai.

By closing loopholes in its regulations, China is trying to stabilize the Yuan after a surprising revamp of its currency-valuation system in August led to capital outflows and prompted policy makers to tap $213 billion of foreign reserves to support the Yuan.

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     29.131

Money Market Highlights

O/N                            1.0000
30 Day                       9.3932
90 Day                     10.6283
180 Day                   12.3776
USD 1 Month           0.4239
USD 2 Months         0.5104
USD 3 Months         0.6067
USD 6 Months         0.8334

Benchmark Yields
Tenor      Maturity      Yield (%)
91d             31-Mar-16       3.36
182d          30-Jun-16        7.22
364d          15-Dec-16        8.46
2y               31-Aug-17        9.08
3y               30-May-18      9.08
5y               13-Feb-20       10.87

Indicative Currency Exchange Rates
Bid        Offer

USDNGN      197.00      199.50
EURUSD       1.0809     1.1012
GBPUSD        1.4719      1.4921
USDJPY         120.39     120.42
USDCHF       0.98655   0.9968
GBPEUR         1.3486    1.3690
USDZAR         15.5162   15.7196

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