Financial market products & services update

*Financial markets.

*Financial markets.

26 May 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Nigeria’s distributable revenues to the three tiers of government fell in April to 281.5 billion Naira ($1.42 billion), down 18.25 billion Naira from March due to low oil prices, the finance minister said on Wednesday. The fall in revenue was caused by the “drop in the average price of crude oil,” Finance Minister Kemi Adeosun told journalists. “A marginal drop in income was recorded from oil and gas royalties and import duties,” she added. Nigeria, a member of OPEC, relies on crude sales for about 70 percent of its government revenues.

FIXED INCOME: Buyers dominated in bonds on the back of Tuesday’s MPC outcome. With macro outlook still looking bleak, there was resistance to buy bonds below 13%. By mid-afternoon, bonds felt better offered and at close had erased some of the earlier gains. Bill market equally rallied. Demand was seen across the entire curve. We expect inflows from an OMO maturity totaling N83.8 billion to support more demand in bills today.

FX: The CBN weekly Special intervention holds today. The intervention rate is still maintained at $/NGN 197.00.

CHINA: Beijing has accused the US of damaging trade after Washington levied new duties of up to 450% on specific steel imports from China. It was the latest move by the US against cheap steel imports. The new tax to protect domestic production affects corrosion-resistant steel. Lower duties will be put on steel from a number of other countries. It comes one week after the US raised taxes on cold-rolled flat steel, which is widely used in car production. Beijing said it was unhappy with the US “deliberately suppressing” imports, describing it as an “irrational” move harmful to co-operation between the two countries. “China will take all necessary steps to strive for fair treatment and to protect the companies’ rights,” the Chinese Commerce Ministry said. The US also issued duties of between 3% and 92% on corrosion-resistant steel from Italy, India, South Korea and Taiwan. The 450% duty on Chinese products replaces a duty of 256% that had been introduced last year.

E.U.: Spanish consumer strength boosted by job creation helped maintain growth momentum in the first quarter as the nation grappled with political deadlock. Household consumption rose 0.9 percent from the previous three months, the Madrid-based National Statistics Institute said Thursday, in a fresh sign of consumer resilience as the battered labour market heals. Job creation accelerated 0.9 percent in the quarter. From a year ago, employment has expanded at an annual pace of 3.2 percent, with more than 530,000 full-time jobs being created.

COMMODITIES: Brent crude rose above $50 a barrel for the first time in more than six months as a drop in U.S. stockpiles accelerated a rebound from a 12-year low after global disruptions trimmed the market’s glut. Brent for July settlement climbed as much as 52 cents to $50.26 a barrel on the London-based ICE Futures Europe exchange and was at $50.07.

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 23, 2016,       26.5070

Money Market Highlights

O/N                             8.2567
30 Day                      10.3205
90 Day                      12.2209
180 Day                    13.6975
USD 1 Month           0.4442
USD 2 Months         0.5461
USD 3 Months         0.6653
USD 6 Months         0.9682
USD 12 Months        1.06675

Benchmark Yields
Tenor      Maturity      Yield (%)

91d            18-Aug-16        8.74
182d         17-Nov-16         9.62
364d         04-May-17      12.29
2y              27-Apr-17        11.64
3y              29-Jun-19       13.28
5y              13-Feb-20       13.41

Indicative Currency Exchange Rates
Bid        Offer

USDNGN     197.50       199.50
EURUSD      1.1070       1.1272
GBPUSD       1.4623      1.4825
USDJPY        110.06      110.09
USDCHF       0.98665   0.9968
GBPEUR       1.3079      1.3283
USDZAR       15.4819    15.6853

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