Financial market products and services update

*Financial markets.

*Financial markets.

10 March 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Central Bank of Nigeria and Deposit Money Banks have said effective prosecution of fraudsters will be their focus this year. Speaking under the aegis of the Nigerian Electronic Fraud Forum, they also promised to continue to secure electronic payment platforms and protect customer information. The Director, Banking and Payment Systems, CBN, Mr. Dipo Fatokun, who is also the Chairman of the NEFF, stated this during the maiden general meeting of the forum. He said, “Top on the list of the agenda is the setting up of a dedicated e-payment and card crimes unit in the Nigeria Police Force. We also have other things we want to do such as collaboration with the Economic and Financial Crimes Commission on the use of Nigerian cards abroad. “We are in collaboration with the United States’ Federal Bureau of Investigation to combat electronic frauds. These are some of the things we intend to do this year.”

FX: The CBN announced its weekly special auction for this week to hold on Thursday and the intervention rate at $/NGN 197.00.

FIXED INCOME: The buying continued in bonds but it lost some steam yesterday. We closed 5bps tighter with the focus still on the Feb 2020s, followed by the Jan 2026s (both to be re-tapped next week Wednesday). Movements seen in bonds continue to be driven by positioning for this upcoming bond auction. Bill market continued the selloff with money market long N246bn. There has been no OMO maturity this week to support buying in the bill market, hence the weak tone. We might see quiet sessions in both markets today. O/N rate closed unchanged at 5%.

CHINA: China’s consumer price rose the most since mid-2014 in February as food costs jumped amid the week-long Lunar New Year holidays, where millions binge on roast pork, duck, seafood and vegetables. The consumer-price index rose 2.3 percent in February from a year earlier, up from 1.8 percent in January, as food prices surged 7.3 percent. Raising question marks over the durability of that pickup, non-food prices moderated from a month earlier to a 1 percent increase and services inflation slowed.

E.U: The European Central Bank is expected to announce further measures to stimulate the eurozone economy when its governing council meets on Thursday. Inflation has continued to fall, putting more pressure on ECB president Mario Draghi to take action. The annual rate of inflation now stands at minus 0.2% – even further below the bank’s target of just under 2%. A figure that low underlines the weakness in the economies of the 19 countries that use the euro. The ECB is widely expected to cut the deposit rate for funds from commercial banks even further into negative territory. Such a move is intended to encourage banks to lend more money and boost economic activity in theory.

COMMODITIES: Oil halted gains near a three-month high as rising U.S. crude stockpiles countered an increase in gasoline demand. Brent for May settlement lost as much as 48 cents, or 1.2 percent, to $40.59 a barrel on the London-based ICE Futures Europe exchange. The contract on Wednesday climbed $1.42, or 3.6 percent, to $41.07 a barrel.

Macro Economic Indicators
Inflation rate (Y-o-Y) for January 2016            9.62%
Monetary Policy Rate current                            11.00%
FX Reserves (Bn $) as at March 08, 2016          27.881

Money Market Highlights

O/N                             5.0487
30 Day                        7.6966
90 Day                        8.9165
180 Day                     10.7573
USD 1 Month            0.4419
USD 2 Months         0.5295
USD 3 Months         0.6352
USD 6 Months         0.8977

Benchmark Yields
Tenor      Maturity      Yield (%)

91d           09-June-16      5.77
182d         01-Sep-16        7.66
364d        02-Mar-17       9.29
2y             27-Apr-17        9.40
3y            29-Jun-19       10.22
5y            13-Feb-20       11.44

Indicative Currency exchange Rates
Bid          Offer

USDNGN       198.11         198.81
EURUSD        1.0868       1.107
GBPUSD        1.4104        1.4306
USDJPY         113.44        113.47
USDCHF       0.99145     1.0016
GBPEUR       1.2849       1.3053
USDZAR       15.1033     15.3067
JPYNGN       174.8797   174.9803
CHFNGN      198.26      199.95
EURNGN      216.98      218.34
GBPNGN      281.14       282.53

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