Financial market products & services update

*Financial markets.

*Financial markets.

10 June 2016, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Federal government has opted to reduce total budgetary spending on 2016 capital expenditure plan ahead of indication that the budget would not be implemented fully. Minister for Finance, Mrs. Kemi Adeosun, who gave this indication in London while addressing international investors, said the decision was favoured against an option of increased borrowing to plug the increasing revenue gap.

FIXED INCOME: Both the T-bill and Bond market closed weaker yesterday, Bonds continued to sell ahead of next week’s auction and CBN floated a 315-day OMO auction to mop up liquidity from a maturity of N189bn OMO bill, but there was no sale. The Market reacted to the OMO auction news causing a sell-off which cooled off at market close. Traded volumes yesterday were relatively low in both markets. Average t-bill yield is 8.26% while average Bond yield is 13.05%. O/N maintained at 4% with robust liquidity in the money market.

FX: The CBN weekly Special intervention auction was held today.
E.U.: Britain’s trade deficit narrowed in April after goods exports rose to near three-year high. Stronger exports of chemicals, oil, machinery and aircraft parts were behind the improvement, the ONS said. The Office for National Statistics said the deficit was £3.294bn, from £3.532bn in March, the lowest level since September 2015. Recent private sector surveys have pointed to stronger exports and industrial output. The total value of all goods exported jumped by 11.2% in the month, the biggest rise since records started in 1998. That rise took the value of goods exports in April to £26.123bn – not far from an all-time high set in June 2013.

U.S.A.: The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to sustained strength in the labor market despite a sharp slowdown in hiring last month. Other data on Thursday showed wholesale inventories recording their biggest increase in 10 months in April, prompting economists to raise their second-quarter economic growth estimates. The rise in inventories came even as sales at wholesalers rose for a second straight month. Initial claims for state unemployment benefits declined 4,000 to a seasonally adjusted 264,000 for the week ended June 4, the Labor Department said. The drop confounded economists’ expectations for an increase to 270,000.

COMMODITIES: Oil trimmed its weekly advance as a rising U.S. dollar countered declining crude stockpiles and disruptions from Canada to Nigeria. Brent for August settlement lost as much as 57 cents, or 1.1 percent, to $51.38 a barrel on the London-based ICE Futures Europe exchange.

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 08, 2016,    26.401

Money Market Highlights

O/N                                6.2083
30 Day                           9.8766
90 Day                         12.2610
180 Day                       13.7643
USD 1 Month             0.4453
USD 2 Months           0.5373
USD 3 Months           0.6580
USD 6 Months           0.9470
USD 12 Months         1.06675

Benchmark Yields
Tenor        Maturity       Yield (%)

91d              01-Sep-16         7.74
182d           01-Dec-16         9.61
364d          04-May-17        11.65
2y               27-Apr-17         11.07
3y               29-Jun-19        13.72
5y               13-Feb-20        13.91

Indicative Currency Exchange Rates
Bid          Offer

USDNGN         197.50         199.50
EURUSD          1.1201         1.1403
GBPUSD          1.4350         1.4552
USDJPY           106.94        106.97
USDCHF          0.96005     0.9702
GBPEUR          1.2685        1.2889
USDZAR          14.8456      15.0490
JPYNGN          186.1197     186.2203
CHFNGN        205.47         207.16
EURNGN        224.26        225.62
GBPNGN        286.94        288.34

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