Financial market products & services update

*Financial markets

*Financial markets.

06 June 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Nigeria’s government has recovered $9.1 billion in stolen money and assets, its information and culture minister said on Saturday, as its corruption crackdown continues against the backdrop of the country’s worst economic crisis in years. President Muhammadu Buhari, elected last year largely on his vow to fight corruption, has vowed to recover “mind-boggling” sums of money stolen from the oil sector and said public coffers were “virtually empty” when he took office last May. Since then the country has endured an economic crisis caused by the sharp fall in global oil prices, making the need to recoup lost money, acute. Crude sales account for around 70 percent of national income. In a statement, Information Minister Lai Mohammed said cash and assets recovered between May 29 last year when Buhari took office, and May 25 this year totaled $9.1 billion. The government has said it plans to generate 3.38 trillion Naira ($17 billion) this year from non-oil sources to help fund the $30.6 billion budget signed into law by Buhari last month. It was not immediately clear how much outstanding money in total is still being sought by the government.

FX: The CBN weekly Special intervention auction results are expected today. The intervention rate is still maintained at $/NGN 197.00.

FIXED INCOME: The market closed on a bullish trend last week, not because of strong fundamentals, but just on demand and supply. Money Market liquidity continued to push the purchase of short-dated t-bills as the yields dropped another 31bps on Friday. Bonds are still muted, limited price action and also very limited volume in the market. Bond moved up marginally by 8bps, average yields now at 8.60% and 12.62% for T-bills and Bonds respectively. Money market liquidity was still very decent above N400bn and O/N closed at 3%.

U.S.: US job creation in May fell to its lowest level in more than five years, a sign of economic weakness that may limit the Federal Reserve’s ability to raise interest rates soon. The Labor Department said that employers added just 38,000 jobs last month, the fewest since September 2010. The jobless rate fell to 4.7% from 5%, the lowest since November 2007. But this was partly due to people dropping out of the labour force and no longer being counted as unemployed. The government said a month-long Verizon strike had depressed employment growth by 34,000 jobs. The strikers would have been considered unemployed and counted in the figures. But even without the Verizon strike, non-farm payrolls would have increased by just 72,000. The goods-producing sector, which includes mining and manufacturing, shed 36,000 jobs, the most since February 2010.

E.U.: The pound fell sharply after opinion polls suggested support for the UK leaving the EU is growing. Sterling hit a three-week low against the dollar, dropping more than 1.5 cents to $1.4358. Against the euro, the pound was nearly one euro cent lower at €1.2677. One opinion Poll found 45% favoured the UK leaving the EU, with 41% wanting to stay. Another poll also found the Leave campaign ahead by 43% to 40%.

COMMODITIES: Oil advanced as Abu Dhabi forecast prices could climb as high as $60 a barrel amid a glut that’s shrunk quicker than projected. Brent for August settlement increased as much as 60 cents to $50.24 a barrel on the London-based ICE Futures Europe exchange. Prices slipped 40 cents to close at $49.64 on Friday.

Macro Economic Indicators
Inflation rate (Y-o-Y) for April 2016,        13.70%
Monetary Policy Rate current                    12.00%
FX Reserves (Bn $) as at Jun 02, 2016,   26.37

Money Market Highlights

O/N                          3.2700
30 Day                     9.0184
90 Day                    11.4062
180 Day                  12.7870
USD 1 Month         0.4648
USD 2 Months       0.5598
USD 3 Months       0.6822
USD 6 Months       0.9857
USD 12 Months     1.06675

Benchmark Yields
Tenor      Maturity     Yield (%)

91d            01-Sep-16       7.23
182d         01-Dec-16       9.13
364d        04-May-17      11.40
2y             29-Jun-19      10.76
3y             13-Feb-20      13.13
5y             27-Jan-22      13.60

Indicative Currency Exchange Rates
Bid        Offer

USDNGN     197.50      199.50
EURUSD      1.1241       1.1443
GBPUSD      1.4277       1.4479
USDJPY       107.16       107.19
USDCHF      0.96965   0.9798
GBPEUR      1.2574       1.2778
USDZAR      14.9820    15.1854
JPYNGN      185.6197   185.7203
CHFNGN     203.35      205.04
EURNGN     225.04      226.40
GBPNGN      285.40     286.79

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