Financial market products & services update

*Financial markets

*Financial markets

31 May 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: The Nigerian Customs department announced today it will begin to use the rate of N285 to the dollar for the calculation of duty on all imports from Wednesday, June 1, 2016.

FX: The CBN weekly Special intervention was held last week with results yet to be released. The intervention rate is still maintained at $/NGN 197.00.
FIXED INCOME: Quiet close to the week. There was virtually no activity in bonds until after mid-day when pockets of selling interest emerged. In the midst of that, June 2019s still staged a decent recovery on small volume. Bill market was also quiet but the tone was mostly, mixed ahead of the auction this week. On offer was N45.08bn 91day, N18bn 182-day, and N80bn 364-day. FAAC has been approved and should hit the system this week.

U.S.: Federal Reserve chair Janet Yellen said she expects interest rates to rise in “the coming months” if the US economy continued to improve. The Fed chair said gradual rate rises would be appropriate. “If the labour market continues to improve, and I expect those things to occur … in the coming months such a move would be appropriate,” she said. The central bank meets on 14-15 June to discuss raising rates. The Fed raised interest rates by 0.25% for the first time in nine years last December and has left them unchanged since. “We saw relatively weak growth last year, but growth looks to be picking up,” Ms. Yellen said. On Friday, the US Commerce Department revised its estimate for first quarter GDP growth up to 0.8%, from the sluggish 0.5% originally estimated.

E.U.: The European Central Bank will keep using all instruments at its disposal to counter the risk of low inflation in the euro region, Governing Council member Ignazio Visco said. “For monetary policy, the main challenge remains the persistence of excessively low inflation,” Visco, who is also governor of the Bank of Italy, said in the text of a speech delivered on Tuesday in Rome at the central bank’s annual meeting. “We will continue if necessary to deploy all the instruments made available to us in our mandate.” The ECB will release updated economic forecasts on Thursday that could provide further clues about the impact of its stimulus program. The Frankfurt-based central bank’s Vice President Vitor Constancio said last week that he thinks euro-area inflation will be close to the ECB’s goal of just under 2 percent two years from now, reflecting the unconventional policies it deployed and rising oil prices.

COMMODITIES: Oil is set for the longest run of monthly gains in five years as output disruptions from Nigeria to Canada reduce supply before OPEC meets Thursday in Vienna to discuss production policy. Brent for July settlement, which expires Tuesday, was at $49.76 a barrel on the London-based ICE Futures Europe exchange after rising 0.9 percent 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 23, 2016,     26.507

Money Market Highlights

O/N                          5.7500
30 Day                     9.9313
90 Day                    11.9021
180 Day                  13.5537
USD 1 Month        0.4567
USD 2 Months      0.5580
USD 3 Months      0.6666
USD 6 Months      0.9756
USD 12 Months    1.06675

Benchmark Yields
Tenor      Maturity      Yield (%)

91d            01-Sep-16        8.49
182d         01-Dec-16        9.46
364d         04-May-17      11.55
2y              27-Apr-17       10.95
3y              29-Jun-19      13.04
5y              13-Feb-20      13.52

Indicative Currency Exchange Rates
Bid       Offer

USDNGN    197.50      199.50
EURUSD     1.1029      1.1231
GBPUSD     1.4504      1.4706
USDJPY      110.99      111.02
USDCHF     0.98655  0.9967
GBPEUR     1.3021      1.3225
USDZAR     15.7489    15.9523
JPYNGN     179.2897  179.3903
CHFNGN    199.88      201.57
EURNGN    220.90     222.26

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