Financial market products & services update

*Financial markets.

*Financial markets.

15 April 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The International Monetary Fund, IMF, on Thursday waded into the impasse between the executive arm of government and the National Assembly over the 2016 budget, advising the Nigerian government to resolve the issues surrounding the budget and have it assented to, just as it renewed the call for the Central Bank of Nigeria (CBN) to implement a flexible foreign exchange regime. IMF Managing Director, Christine Lagarde, who spoke at the opening press briefing of the fund at the 2016 Spring Meetings of the IMF-World Bank in Washington D.C., also told the federal government to seek assistance from international institutions capable of helping the Nigerian economy overcome its current economic challenges. “Our recommendation is that, first, Nigeria seek help from the international institutions that can best help.

FIXED INCOME: Bonds opened weaker but closed on a better tone yesterday. Street scrambled to cover short positions and bid/offer spreads narrowed. The long end of the bill curve still feels soft. Offers quoted at 10% handle for maturities >300days but not a lot of trades going through. The O/N rate was quoted at 6% after the OMO auction announcement but closed the day at 4%. N53.931bn of 217day paper (17 Nov 16 bills) was mopped up Yesterday at 9.51% yield – leaving extra N37.5bn in the system from today’s maturity.

FX: The CBN special auction for this week held yesterday and the intervention rate maintained at $/NGN 197.00.

CHINA: China’s economy stabilized last quarter and gathered pace in March as a surge in new credit spurred a property sector rebound while raising fresh questions over the sustainability of the debt-fueled expansion.
Gross domestic product rose 6.7% in the first quarter from a year earlier, meeting the median projection of economists surveyed by Bloomberg and in line with the government’s growth target of 6.5% to 7% for the full year. New credit, industrial output, fixed-asset investment and retail sales picked up in March and beat analysts’ forecasts.

E.U: The International Monetary Fund raised doubts about Greece’s ability to keep up repayments under a plan being negotiated with its European creditors, who insisted they’ve already provided plenty of debt relief.
“Currently, as envisaged, the debt is not sustainable and what is required is a debt operation,” IMF Managing Director Christine Lagarde said Thursday in Washington, where finance ministers and central bankers are attending the fund’s spring meetings.
Lagarde said she’s skeptical about Greece’s ability to meet the budget surplus target set under an 86-billion-euro ($97 billion) bailout by euro-area governments, who are reviewing whether to release the loan’s second installment. Under the EU program, Greece is committed to posting a fiscal surplus before interest payments of 3.5% of gross domestic product within two years.

COMMODITIES: The world’s top oil exporters are burning through their petrodollar assets at an accelerating pace, increasing the pressure to reach a deal to freeze production to bolster prices.
The 18 nations set to gather in Doha on Sunday to discuss a production freeze have spent $315 billion of their foreign-exchange reserves — about a fifth of their total — since the oil slump started in November 2014, according to data compiled by Bloomberg. In the last three months of 2015, reserves fell nearly $54 billion, the largest quarterly drop since the crisis started.

Macroeconomic Indicators
Inflation rate (Y-o-Y) for March 2016           12.80%
Monetary Policy Rate current                         12.00%
FX Reserves (Bn $) as at April 13, 2016,       27.471

Money Market Highlights
NIBOR (%)

O/N                                4.2500
30 Day                           8.2956
90 Day                          10.3549
180 Day                        12.4317
LIBOR (%)
USD 1 Month               0.4371
USD 2 Months            0.5207
USD 3 Months            0.6296
USD 6 Months            0.8941
USD 12 Months          1.06675

Benchmark Yields
Tenor       Maturity        Yield (%)

91d              14-July-16         5.75
182d            13-Oct-16          8.69
364d           16-Mar-17        10.13
2y                31-Aug-17         10.78
3y                30-May-18       11.07
5y                13-Feb-20        12.02

Indicative Currency Exchange Rates
Bid        Offer

USDNGN          197.50      199.50
EURUSD           1.1158       1.1360
GBPUSD           1.4073      1.4275
USDJPY            109.13      109.16
USDCHF           0.96255   0.9727
GBPEUR           1.2489      1.2693
USDZAR           14.4073    14.6110
JPYNGN           182.5097  182.6103
CHFNGN          205.07      206.76
EURNGN          224.51       225.88
GBPNGN          285.77       287.17

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