Financial market products & services update

*Financial markets.

*Financial markets.

21 April 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: The federal government has said that talks to reach a truce between it and the National Assembly on grey areas in the 2016 budget were still ongoing, adding that it could not give any definite date as to when the budget would be signed into law.
The implication of the government’s statement is that the hopes of many Nigerians who were expecting that the 2016 budget would be signed into law anytime soon has been dashed.
This was one of the outcomes of the Federal Executive Council (FEC) meeting which held at the Presidential Villa in Abuja Wednesday and presided over by President Muhammadu Buhari,
Despite the absence of clarity on the fate of this year’s budget, the government set out the timetable for the submission of the 2017 budget, explaining that this was done to ensure early delivery of next year’s expenditure estimates.

FIXED INCOME: There was an attempted rally in bonds yesterday morning but it was short-lived. Theme in bonds continued to be dominated by locals selling and real money accounts picking up paper in bits at ‘perceived’ lows. T-Bill auction stop rates adjusted higher as expected. 8.04% (+185bps), 9.41% (+33bps) and 11.42% (+94bps) yield on the 91, 182 and 364 days respectively. We should see the rates in T-bills re-price higher today and the selling filtering into bonds especially on the April 2017s.

FX: The CBN held its weekly special intervention today. The intervention rate was maintained at $/NGN 197.00.

U.K: U.K. retail sales posted their biggest monthly decline in more than two years in March as Britons bought less of everything from food to clothing.
The volume of sales excluding auto fuel fell 1.6% from February, the most since January 2014. Total sales dropped 1.3%. Both far exceeded the modest declines forecast in a Bloomberg survey.
The Office for National Statistics, which published the data Thursday, also revealed that public-sector borrowing overshot official forecasts in the latest fiscal year, and debt as a share of the economy rose.

E.U: The European Commission launched the process for selecting members of the new European Fiscal Board with the aim of having the independent advisory body operational by September.
The board will give advice on the fiscal stance appropriate for the euro area as a whole and also will evaluate the implementation of the European Union fiscal framework, the commission, the EU executive in Brussels, said in a statement on Thursday.
The members of the new board, who will not be employees of the commission, will provide independent expertise in their fields, it said. The commission anticipates that selection interviews for the board will be held in June, according to the statement.

COMMODITIES: Oil traded near the highest in almost five months after U.S. output dropped to the lowest since October 2014 and Iraq said producers plan new output freeze talks as early as next month.
Brent in London swung between gains and losses after rising 6.7% over the previous two sessions. U.S. crude output fell to 8.95 million barrels a day in the week ended April 15, the Energy Information Administration reported. Major OPEC and other crude producers will meet in Russia, possibly in May, to make another effort to agree on an output cap.

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 19, 2016,       27.341

Money Market Highlights

O/N                              7.2500
30 Day                         9.1990
90 Day                        11.1563
180 Day                      12.8207
USD 1 Month              0.4411
USD 2 Months           0.5265
USD 3 Months           0.6348
USD 6 Months           0.9036

Benchmark Yields
Tenor       Maturity        Yield (%)

91d             21-July-16         6.83
182d          20-Oct-16          9.19
364d          6-Apr-17          10.34
2y              31-Aug-17         11.34
3y              30-May-18       11.71
5y              13-Feb-20        12.78

Indicative Currency Exchange Rates
Bid         Offer

USDNGN      197.50        199.50
EURUSD       1.1229        1.1431
GBPUSD       1.4289        1.4491
USDJPY        109.71         109.74
USDCHF       0.965485  0.9751
GBPEUR       1.2601        1.2805
USDZAR       14.1408      14.3436
JPYNGN       181.3697    181.4703
CHFNGN      204.38       206.07
EURNGN      224.51        225.88
GBPNGN      285.77        287.17

About the Author