08 January 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: The Nigerian Senate has urged the CBN to relax its strict Foreign Exchange policy as it is doing more harm to the economy than good.
Senate President Bukola Saraki during a meeting with the Managing Director of the International Monetary Fund, IMF, Christine Lagarde said small businesses especially, are being made to suffer unnecessarily.
He called on the apex bank to introduce a more flexible foreign exchange regime and reduce the present restrictions on the autonomous market which does not allow business men to bring in foreign exchange or utilize what they have in their accounts. The Senate President had equally canvass a similar view at a private meeting with CBN Governor, Mr. Godwin Emefiele during which he implored him to consider the effects of the present forex regime on small businesses which are dying following evaporating crude oil revenue.
FIXED INCOME: Oil price trading lower not helping sentiments at all in the Fixed Income space. Overall, we pushed 50bps wider in both T-bills and bonds. Some intra-day short covering towards close in bonds but market still remains weak. This negative sentiment also weighed in at Yesterday’s OMO auction where demand waned – only N33.077bn mopped up at 8.29% yield.
FX: The CBN had its first special intervention auction yesterday and the offered rate was at $/NGN 197.00.
COMMODITIES: Oil was swept along by volatility in Chinese markets, rallying from a 12-year low as the country sought to quell losses in its equities and stabilize its currency.
Futures rose as much as 3.2% in New York after China suspended a controversial equity circuit breaker system and its central bank set the Yuan’s reference rate little changed after an 8day stretch of weaker fixings. Crude slid Thursday to the lowest since December 2003 as market turbulence reverberated across the globe amid concern over economic growth in the world’s biggest energy consumer.
CHINA: Chinese stocks gained in volatile trading after the government suspended a controversial circuit breaker system, the central bank set a higher Yuan fix and state-controlled funds were said to buy equities.
The Shanghai Composite Index closed 2% higher, after falling as much as 2.2% earlier. Regulators removed the circuit breakers after plunges this week closed trading early on Monday and Thursday. The central bank set the currency’s reference rate little changed Friday after an eight-day stretch of weaker fixings that roiled global markets. State-controlled funds purchased Chinese stocks on Friday, focusing on financial shares and others with large weightings in benchmark indexes, according to people familiar with the matter.
AFRICA: South African buyers of white corn may contract farmers in South America for supplies as the worst drought since 1992 ravages the harvest of the country’s key staple food, according to the biggest growers’ association.
Brazil and Argentina could become significant sources of white maize for South Africa starting at the end of 2016 as food producers seek as much as 2.5 million metric tons for the marketing year through April 2017. Shipments that large would exceed the previous record for white-corn imports of 747,000 tons set in 1996 by more than three times, data from the SA Grain Information Service going as far back as 1992 show.
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 28.959
Money Market Highlights
30 Day 8.2930
90 Day 9.4643
180 Day 11.1696
USD 1 Month 0.4235
USD 2 Months 0.5166
USD 3 Months 0.6201
USD 6 Months 0.8513
Tenor Maturity Yield (%)
91d 07-Apr-16 4.24
182d 14-Jul-16 7.69
364d 15-Dec-16 8.56
2y 31-Aug-17 10.66
3y 30-May-18 11.04
5y 13-Feb-20 11.66
Indicative Currency Exchange Rates
USDNGN 197.00 199.50
EURUSD 1.0777 1.0978
GBPUSD 1.4505 1.4708
USDJPY 118.29 118.31
USDCHF 0.99255 1.0029
GBPEUR 1.3323 1.3526
USDZAR 15.9348 16.1354