Financial market products & services update

*Financial markets.

*Financial markets.

18 April 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has said the economy would experience a boom by the end of 2018 just as he hinted of a hike in interest rate by May this year at the monetary policy committee (MPC) of the apex bank following the inflation rate that has galloped to 12.4% from 11.8%. Emefiele, who made this prediction yesterday at the closing press briefing by the Nigerian delegation, noted that the economy was currently going through structural reforms and now attracting a series of investments that would translate to a major recovery in about two years. The briefing was jointly held by the Ministry of Finance and CBN at the end of the 2016 spring meetings of the IMF-World Bank.

FIXED INCOME: More selling in bonds yesterday and this magnified as auction whispers began to filter in. Longend of the bill curve (>200 days) also saw some selling pressure. Bond auction prints at 12% (+67bps), 12.60% (+51bps) and 13.08% (+68bps) yield on the 2020s, 2026s and 2036s respectively. The 2036s showed market testing for higher yields as strong indications point to higher inflation prints in the coming months. Only N40bn vs. N50bn was sold as the DMO managed the upside.

FX: The CBN special auction result for last week is expected to be released today. The intervention rate was maintained at $/NGN 197.00

JAPAN: Japanese stocks tumbled by the most in two weeks after talks between OPEC members and other oil producers ended without any agreement on limiting supplies, while the yen gained after the Group of 20 finance ministers signaled opposition to curbing the currency’s strength.
Energy stocks fell as crude futures sank. Insurers were the largest losers in the wake of Thursday’s earthquake and strong aftershocks Saturday that pushed the death toll higher. Companies that halted some production after the quake also dropped, including Sony Corp., which lost 6.8%.
The yen rose 0.7% to 107.95 per dollar, strengthening for a second day after Japan’s G-20 counterparts signaled opposition to shield the country’s fragile economy via intervention to curb the currency’s strength.

U.K: Leaving the European Union would deliver a blow to Britain’s economy and leave it 6% smaller by 2030, according to a Treasury analysis produced as the government attempts to dissuade the electorate from voting to quit the bloc.
The details will be published by Chancellor of the Exchequer George Osborne on Monday morning. The first week of formal campaigning ahead of the June 23 referendum sees the government turn its biggest guns on the arguments advanced by those backing a so-called Brexit.

COMMODITIES: Oil tumbled by the most in two months after output talks Sunday between the world’s biggest producers ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices.
Futures fell as much as 6.8% in New York, the biggest intraday drop since Feb. 1. The summit in the Qatari capital, which dragged on for more than ten hours beyond its initially scheduled conclusion, finished with no final accord. There were significant hurdles to any deal after Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said the kingdom wouldn’t restrain its production without commitments from other major producers including Iran, which has ruled out freezing for now.

Macro Economic Indicators
Inflation rate (Y-o-Y) for March 2016           12.80%
Monetary Policy Rate current                         12.00%
FX Reserves (Bn $) as at April 14, 2016,      27.450

Money Market Highlights
NIBOR (%)

O/N                              4.2500
30 Day                         8.3768
90 Day                       10.3926
180 Day                      12.4791
LIBOR (%)
USD 1 Month             0.4362
USD 2 Months           0.5237
USD 3 Months           0.6331
USD 6 Months           0.9019

Benchmark Yields
Tenor     Maturity      Yield (%)

91d            14-July-16         5.92
182d         13-Oct-16           8.92
364d          6-Apr-17          10.34
2y              31-Aug-17         10.82
3y              30-May-18        11.14
5y              13-Feb-20         12.00

Indicative Currency Exchange Rates
Bid          Offer

USDNGN         197.50        199.50
EURUSD          1.1200       1.1402
GBPUSD           1.4097      1.4300
USDJPY            108.40      108.43
USDCHF           0.96015    0.9706
GBPEUR           1.2460       1.2664
USDZAR           14.5008     14.7042
JPYNGN           183.5197   183.6203
CHFNGN          205.41       207.10
EURNGN          224.51       225.88
GBPNGN          285.77       287.1

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