26 February 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: As the Nigerian economy continues to reel from low oil prices and its attendant consequences, presidency sources confirmed yesterday that President Muhammadu Buhari is set to convene a major national economic conference next month.
One official in the presidency said the president himself would declare the conference open and participate in deliberations with government officials, the legislature, and the private sector.
The decision by the president to hold the economic conference may not be unconnected to the growing clamour by Nigerians of influence on the need to stem the economic slide through a public discourse where participants could air their views and proffer solutions on the measures to stem the economic decline.
FIXED INCOME: OMO maturity of N257bn caused O/N to drop to 1%. Both bonds and T-bills traded slightly heavy on some profit taking. Bill market continued to react to the higher issue size at next week’s PMA (despite it being a roll-over). This is, in turn, filtering into the bond market. Overall, it was still a quiet trading session yesterday with little or no activity from real money accounts. We expect the same trend to continue until today.
FX: The CBN weekly special auction for this week held yesterday and the intervention rate at $/NGN 197.00. Results are expected today.
COMMODITIES: Oil headed for its biggest weekly advance since August as Russia said talks with Iran are continuing before a planned producer meeting next month on a proposed output freeze. Futures were little changed in New York, up 12% for the week. The cap agreed with Saudi Arabia will need to be in place for a minimum of 12 months to support prices, Russian Energy Minister Alexander Novak said Thursday. A meeting with the Iranian Oil Minister is possible next month, he said. Iran, seeking to boost exports after sanctions were lifted, said the deal is “ridiculous,” while Iraq said a pact hinges on unified support.
CHINA: China’s central bank tweaked the description of its monetary policy stance to reflect a recent ramp-up in liquidity injections and moves to guide money market rates lower, with Governor Zhou Xiaochuan highlighting scope for further actions if needed.
“China still has some monetary policy space and multiple policy instruments to address possible downside risks,” Zhou said at a conference in Shanghai, speaking hours before meeting his counterparts from the Group of 20 developed and emerging markets. Asian stocks, industrial metals and higher-yielding currencies rose.
U.K: Consumer sentiment, the housing market, the pound. It’s all taking a hit from “Brexit.” Property analyst Home track said on Friday the upcoming referendum on whether Britain should leave the European Union will curb housing activity and GfK’s measure of consumers’ economic optimism plunged to the lowest in almost three years. The pound has fallen more than 3% against the dollar this week and is headed for its worst week since 2009.
Macro Economic Indicators
Inflation rate (Y-o-Y) for January 2016 9.62%
Monetary Policy Rate current 11.00%
FX Reserves (Bn $) as at February 24, 2016, 27.804
Money Market Highlights
30 Day 7.1393
90 Day 8.3753
180 Day 9.9021
USD 1 Month 0.4338
USD 2 Months 0.5206
USD 3 Months 0.6346
USD 6 Months 0.8783
Tenor Maturity Yield (%)
91d 26-May-16 3.68
182d 18-Aug-16 6.37
364d 16-Feb-17 8.75
2y 31-Aug-17 9.63
3y 30-May-18 10.04
5y 13-Feb-20 11.70
Indicative Currency Exchange Rates
USDNGN 197.00 199.50
EURUSD 1.0962 1.1164
GBPUSD 1.3885 1.4087
USDJPY 112.82 112.85
USDCHF 0.98335 0.9935
GBPEUR 1.2541 1.2745
USDZAR 15.4671 15.6705