Financial market products & services update

*Financial markets.

*Financial markets.

24 May 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: The Federal Government says it is working out a palliative package to assist the manufacturing sub sector navigate through difficulty accessing foreign exchange for the importation of critical components of their production. President Muhammadu Buhari, represented by Vice President Yemi Osinbajo, stated this on Monday, in Lagos, at the handing over of vehicles and other security equipment worth 1.85 billion, donated by the Lagos State Government to the police and other security agencies in Lagos.

FIXED INCOME: Things felt quiet on the whole but the squeeze in bonds continuing from last week could not be ignored. Seems like some buying In bonds were being unwound ahead of the MPC. Bill market drifted wider after some initial buying. Overall, focus is definitely on today’s MPC outcome. O/N rate closed at 10%.

FX: The CBN weekly Special intervention results are being awaited. The intervention rate was maintained at $/NGN 197.00.

CHINA: China’s local governments must quicken spending to help reduce the size of unspent budget funds and support the economy that faces downward pressure, the Ministry of Finance said on Monday. The comment came after data showed China’s fiscal expenditures in April rose 4.5 percent from a year earlier, slowing sharply from a 20.1 percent jump in March. The government has pledged to ramp up fiscal support this year, boosting the fiscal deficit to 3 percent of gross domestic product (GDP), after economic growth last year cooled to a 25-year low.

U.S.A.: U.S. interest rates being kept too low for too long could cause financial instability in future and stronger market expectations for a rate rise are “probably good”, St. Louis Federal Reserve President James Bullard said on Monday. A relatively tight labor market in the United States may also exert upward pressure on inflation, raising the case for higher interest rates, Bullard added. His comments come as financial markets have increased expectations for a U.S. interest rate hike in June or July and a range of policymakers are now stating that a rise is firmly on the table for the next policy meeting in June.

COMMODITIES: Brent declined for a fifth day before weekly U.S. government stockpile data and as Canadian oil-sands producers prepared to restart operations. Brent for July settlement lost as much as 46 cents to $47.89 a barrel on the London-based ICE Futures Europe exchange and was at $47.99. The contract fell 37 cents, or 0.8 percent, to $48.35 on Monday.

Macro Economic Indicators
Inflation rate (Y-o-Y) for April 2016,        13.70%
Monetary Policy Rate current                     12.00%
FX Reserves (Bn $) as at May 20, 2016,   26.569

Money Market Highlights

O/N                                    8.9200
30 Day                               11.1471
90 Day                               12.7602
180 Day                             14.3454
USD 1 Month                   0.4433
USD 2 Months                 0.5439
USD 3 Months                 0.6613
USD 6 Months                 0.9554
USD 12 Months               1.0667

Benchmark Yields
Tenor      Maturity      Yield (%)

91d            18-Aug-16       9.49
182d         17-Nov-16      10.62
364d        04-May-17     13.37
2y             27-Apr-17       12.59
3y             29-Jun-19      13.53
5y             13-Feb-20      13.67

Indicative Currency Exchange Rates
Bid           Offer

USDNGN             197.50        199.50
EURUSD             1.1077         1.1279
GBPUSD              1.4437        1.4639
USDJPY               109.55        109.58
USDCHF              0.98725     0.9974
GBPEUR              1.2904        1.3108
USDZAR              15.7188      15.9222

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