09 June 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: The impact of record incentives to boost Nigeria’s economy will become visible in the third quarter as authorities fast-track plans to release funding in a country that’s on the brink of a recession, according to Budget and Planning Minister Udoma Udo Udoma.
“Substantial releases” of a 350 billion naira ($1.8 billion) stimulus provided for in the budget will be made available in the next few weeks, Udoma told reporters Wednesday in Abuja. “By the third quarter we will start to see the impact of what we are doing to reflate the economy,” he said.
FX: The CBN weekly Special intervention auction results was released yesterday and surprisingly the Intervention for this week is yet to be announced.
FIXED INCOME: The T-bills market continue to enjoy excess liquidity in the money market, Local players are buying the in short dated bills to invest the cash. The 21jul16s bill was the biggest mover, dropping by 113bps in yesterday trading session. The average yield however dropped by 21bps and closed at 8.22%. Bonds the other hand was much weakness and market didn’t show any interest in bonds. Inflation data and next round of auction supply are around the corner and are main reasons for this situation.
E.U.: European equities continued their slide after halting a two-day rebound.
The Stoxx Europe 600 Index lost 0.7% at 8:19 a.m. in London, with more than 500 of its members down. The gauge fell on Wednesday after its biggest two-day gain in two weeks. Germany’s DAX Index dropped the most among western-European markets, with Deutsche Telekom AG leading it down 0.8%.
The Stoxx 600 has struggled to keep its rebound going after rising as much as 16% from its February low. Even with signs that the economy is improving amid aggressive European Central Bank stimulus, the gauge closed 5.8% down for the year on Wednesday. While a Citigroup Inc. index tracking the number of corporate profit upgrades versus downgrades turned positive for the first time since last year, analysts are still projecting a 3.2% decline in earnings this year.
MIDDLE EAST: Gulf oil exporters must cut spending and narrow their budget shortfalls to keep their currencies pegged to the dollar, the International Monetary Fund said. While substantial foreign assets have allowed the six members of the Gulf Cooperation Council to fix the value of their currencies to the greenback, keeping the status quo comes at a price as lower crude prices strain public finances, the lender said in a report titled “Learning to Live with Cheaper Oil.” “When a country faces prolonged fiscal and external deficits, policy adjustment must come from fiscal consolidation measures,” the IMF said in the report authored by Martin Sommer, deputy chief of its regional studies division. Maintaining the currency pegs “will require sustained fiscal consolidation through direct expenditure cutbacks and non-oil revenue increases,” it said.
COMMODITIES: Oil advanced for a fourth day after government data showed U.S. inventories fell a third week and a new wildfire prompted Canadian producers to shut output.
Futures gained as much as 0.9% in New York, rising from the highest close in 10 months and extending its run of advances to the longest since April 22. Crude stockpiles dropped by 3.23 million barrels last week to the lowest in two months, the U.S. Energy Information Administration said on Wednesday. A new wildfire prompted Canadian oil producers Cenovus Energy Inc. and Canadian Natural Resources Ltd. to shut production.
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 07, 2016, 26.383
Money Market Highlights
30 Day 9.7025
90 Day 12.1641
180 Day 13.4742
USD 1 Month 0.4458
USD 2 Months 0.5361
USD 3 Months 0.6566
USD 6 Months 0.9489
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 08-Sep-16 7.65
182d 08-Dec-16 9.46
364d 01-Jun-17 11.63
2y 27-Jul-17 11.56
3y 29-Jun-19 13.87
5y 13-Feb-20 13.81
Indicative Currency Exchange Rates
USDNGN 197.50 199.50
EURUSD 1.1256 1.1459
GBPUSD 1.4364 1.4567
USDJPY 106.44 106.47
USDCHF 0.95585 0.9660
GBPEUR 1.2635 1.2839
USDZAR 14.7741 14.9775
JPYNGN 186.9397 187.0403
CHFNGN 206.32 208.01
EURNGN 225.39 227.75
GBPNGN 285.40 286.79