Financial market products & services update

*Financial markets.

*Financial markets.

09 May 2016 Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: The twin attacks, last week, on Chevron’s oil and gas facilities in the Escravos area of Delta State, has resulted in a drop in power generation from about 3,600 megawatts (MW) to 2,500MW, translating to a loss of 900MW.
The attacks, which also led to a slump in the country’s crude oil production to a 20-year low, disrupted Chevron’s gas supply to the domestic market, having stopped the delivery of natural gas to the Escravos Gas Plant (EGP), which processes gas for power generation and other end users.
It was gathered that this has wiped off a substantial part of an estimated two billion cubic feet of gas supplied daily to the domestic market for power generation and industrial uses.

FIXED INCOME: Some supply came out on Friday in bonds. There was resistance on the Feb 2020s at low 13% (auction expectations started to weigh in more). For long end bonds, 14% seems to be the psychological level. At 13.90% area, the selloff eased and offer prices were lifted. Real money accounts also seen on the long end but buying in trickles. All eyes on this week bond auction which will set levels.

FX: The results of the CBN weekly Special intervention that held last week is expected today. The rate was maintained at $/NGN 197.00.

U.K: This week, voters tuning into the fraught battle over the U.K.’s future will hear from three heavy-hitters who have already warned about the risks of leaving the single market. The chancellor of the exchequer, the governor of the Bank of England and the head of the International Monetary Fund are set to speak, while the National Institute of Economic and Social Research will share its view on the consequences of a Brexit.
As the nation’s referendum on its EU membership draws closer, Remain campaigners are putting the economy at the heart of battle, arguing Britons would be less well off outside the bloc.

JAPAN : A group of Japanese banks that includes the nation’s biggest three lenders is growing reluctant to sell government bonds to the Bank of Japan, creating what could be an obstacle between Governor Haruhiko Kuroda and his inflation target, analysts said.
Gross transactions of sovereign debt by the nation’s major lenders fell to 2.8 trillion yen ($26 billion) in March, an amount that’s 38 percent of the level a year earlier and the smallest in data going back to April 2004, according to figures from the Japan Securities Dealers Association. While banks scaled back their activity in the secondary market, their net purchases in March were the biggest since the BOJ started unprecedented quantitative and qualitative easing in April 2013.

COMMODITIES: Crude rose as expanding wildfires in Canada knocked out about 1 million barrels a day of output, and after Saudi Arabia replaced Oil MinisterAli al-Naimi with a close ally of the deputy crown prince.
Futures increased as much as 2.9% in New York and 2.5% in London. The blaze has led to cuts equivalent to about 40% of Canada’s oil-sands production, based on IHS Energy estimates. Al-Naimi will be succeeded by Saudi Arabian Oil Co. Chairman Khalid Al-Falih, an ally of Prince Mohammed bin Salman, who has backed the nation’s policy of prioritizing market share over prices and insisted any output freeze must involve Iran.

Macro Economic Indicators
Inflation rate (Y-o-Y) for March 2016 12.80%
Monetary Policy Rate current 12.00%
FX Reserves (Bn $) as at May 05, 2016 26.919

Money Market Highlights

O/N 4.0800
30 Day 8.2335
90 Day 10.3164
180 Day 12.0010
USD 1 Month 0.4379
USD 2 Months 0.5211
USD 3 Months 0.6296
USD 6 Months 0.9071
USD 12 Months 1.06675

Benchmark Yields
Tenor Maturity Yield (%)

91d 04-Aug-16 7.99
182d 03-Nov-16 9.11
364d 20-Apr-17 11.88
2y 31-Aug-17 11.77
3y 30-May-18 12.17
5y 13-Feb-20 13.03

Indicative Currency Exchange Rates
Bid Offer

USDNGN 197.50 199.50
EURUSD 1.1299 1.1502
GBPUSD 1.4286 1.4488
USDJPY 107.64 107.67
USDCHF 0.96525 0.9753
GBPEUR 1.2527 1.2730
USDZAR 14.8687 15.0756
CHFNGN 203.44 205.13
EURNGN 224.51 225.88
GBPNGN 285.77 287.17

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