13 May 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Nigeria needs a “substantial review” of its foreign-exchange policies, including further consideration about devaluing the naira, Vice President Yemi Osinbajo said.
Africa’s largest economy is facing dollar shortages as oil revenue declines due to weaker prices and a drop in production to the lowest in more than 20 years.
Nigerian President Muhammadu Buhari has resisted calls from investors and the International Monetary Fund to devalue the naira, which at the official rate has been pegged since March 2015. The black-market exchange rate, which most businesses have been forced to use, is roughly 320 per dollar. Foreign-exchange trading restrictions and import curbs have led to shortages of goods from gasoline to milk.
FIXED INCOME: Yesterday’s trading session was very busy and extremely volatile especially in bonds. T-Bill market sold off in reaction to Tuesday’s OMO results. While anticipation of higher yields at the auction spooked the bond market some more. We touched an intraday high of 14.5% on the long end of the bond curve before aggressively retracing as auction whispers filtered in.
Auction results showed a highly managed auction. 50% of what was offered was sold. Prints came in at 13.249%, 13.743% and 13.90% on the 5, 10 and 20year respectively.
FX: The results of the CBN weekly Special intervention for this week will hold today. The intervention rate will be maintained at $/NGN 197.00.
U.K: Brexit is dominating the U.K. agenda and the Bank of England is set to update its take on how the vote is affecting the economy on Thursday.
With just six weeks to go until Britain’s referendum on its European Union membership, rate setters led by Governor Mark Carney have already warned uncertainty may be weighing on growth. That’s started to show up in the numbers and while all economists in a Bloomberg survey predict the key rate will be kept at 0.5%, Bank of America Merrill Lynch say one or two of the nine-member panel may vote for a cut.
JAPAN : The Bank of Japan will probably expand its stimulus at one of its next two policy meetings, with first quarter data expected to give policymakers compelling reasons to ease, an academic with close ties to the central bank governor said on Thursday.
The BOJ will also be watching for the outcome of the Group of Seven summit this month, which could show major economies’ willingness to spur global growth and help determine Japan’s own fiscal stimulus agenda.
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 10, 2016 26.801
Money Market Highlights
30 Day 7.8010
90 Day 10.9097
180 Day 12.2976
USD 1 Month 0.4373
USD 2 Months 0.5190
USD 3 Months 0.6281
USD 6 Months 0.9049
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 04-Aug-16 8.34
182d 03-Nov-16 9.51
364d 04-May-17 12.25
2y 27-Apr-17 12.08
3y 29-Jun-19 13.06
5y 13-Feb-20 13.52
Indicative Currency Exchange Rates
USDNGN 197.72 198.42
EURUSD 1.1171 1.1373
GBPUSD 1.4324 1.4526
USDJPY 108.87 108.89
USDCHF 0.96485 0.9750
GBPEUR 1.2550 1.2755
USDZAR 14.8448 15.0480