Financial market products & services update

*Financial markets.

*Financial markets.

01 June 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Nigeria’s trade account turned negative in the first quarter after exports fell by almost half, the national bureau of statistics said on Monday, as lower prices for crude oil slashed government revenues and caused the economy to contract. Nigeria faces its worst economic crisis in years. The value of its exports, mostly crude, plunged 52 percent to 1.27 trillion Naira ($6.4 billion) in the three months to March from a year ago. First-quarter imports dropped 15.8 percent to 1.45 trillion Naira ($7.3 billion), the statistics bureau said, pushing the trade account crossed into the red for the period. The balance of trade for the first quarter was minus 184.1 billion Naira ($925.13 million), down from plus 937.4 billion Naira in the same period a year earlier. Net trade balance stood at $14.5 billion for 2015.

FX: The CBN weekly Special intervention results were released yesterday. The intervention rate is still maintained at $/NGN 197.00.

FIXED INCOME: The week opened on a quiet note following the long weekend, traded volume was still low and there wasn’t much in price action either. The Central Bank floated 29 Dec 16s OMO bill but was unsuccessful again. CBN is reluctant to sell at high levels as the bids ranged from 10.00% – 11.50% discount. Bonds were much quieter as there’s still a sense of uncertainty as to market direction. The Primary Market Auction today is expected to give clearer direction to the market. Money Market closed with over 200bn in the system, this kept O/N rate at 5%.

COMMODITIES: Oil slipped the fourth day, heading for the longest run of declines since April, as OPEC ministers gather in Vienna ahead of a meeting on Thursday to discuss production policy. Brent for August settlement fell as much as 1.3 percent to $49.25 a barrel on the London-based ICE Futures Europe exchange.

U.S.: US consumer spending jumped by 1% in April, the largest month-on-month gain since August 2009. Consumer spending makes up two-thirds of US economic activity. But in May, the consumer confidence index dipped to 92.6 from 94.7 in April, as Americans worried about the long-term outlook of the job market. “Consumers remain cautious about the outlook for business and labour market conditions. Thus, they continue to expect little change in economic activity in the months ahead,” said Lynn Franco, director of economic indicators at the Conference Board. The rise in spending, though, has solidified many investors’ belief that the Federal Reserve will raise interest rates when it meets in June. Consumer spending was flat in March and rose by just 0.2% in February.

INDIA.: India’s economy grew by 7.6% in 2015-16, up from 7.2% the year before, as the country retained its place as the world’s fastest-growing major economy. Quarterly economic growth leapt to 7.9% in the three months to April from a revised 7.2% in the previous quarter, government data showed. That acceleration was greater than analysts had predicted.

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 27, 2016,        26.422

Money Markets Highlights

O/N                               3.6750
30 Day                          9.3562
90 Day                         11.6535
180 Day                       13.1333
USD 1 Month             0.4567
USD 2 Months           0.5580
USD 3 Months           0.6731
USD 6 Months           0.9781
USD 12 Months         1.06675

Benchmark Yields
Tenor      Maturity      Yield (%)

91d             01-Sep-16       8.27
182d           01-Dec-16      9.76
364d          04-May-17    11.69
2y               29-Jun-19     13.20
3y               13-Feb-20     13.62
5y               17-Jan-22      13.72

Indicative Currency Exchange Rates
Bid         Offer

USDNGN       197.50      199.50
EURUSD        1.1050      1.1252
GBPUSD        1.4391       1.4593
USDJPY         110.04      110.07
USDCHF       0.98725    0.9974
GBPEUR       1.2895       1.3099
USDZAR       15.5325     15.7359
JPYNGN       180.7797   180.8803
CHFNGN      199.75       201.44
EURNGN      221.27       222.63
GBPNGN       287.69      289.09

About the Author