Financial market products & services update

*Financial markets.

*Financial markets.

18 July 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: Nigerian inflation accelerated to the highest rate in almost 11 years in June, complicating the task of the central bank in an economy which is at risk of contracting this year. The inflation rate in Africa’s largest economy increased to 16.5 percent from 15.6 in May, the Abuja-based National Bureau of Statistics said in an e-mailed statement on Monday. That’s the highest rate since October 2005, according to reports. Prices rose 1.7 percent in the month.

FX: It was a volatile trading session on Friday, with traded range widening to $/NGN 282.00 – 295.75.

FIXED INCOME: Tone in bonds took another turn on Friday. Dealers cut positions and yields on the recently re-tapped Jan 2026 and Mar 2036, which touched the 15% handle. Tone in bills was equally weak because of tight liquidity.

U.K: Bank of England policymaker Martin Weale said on Monday he was unsure whether he would back an interest rate cut at next month’s BoE meeting, in contrast to most of his colleagues who think stimulus is likely after Britain voted to leave the EU. Weale – who will step down after the August meeting – did not see panic among consumers or businesses after the June 23 Brexit vote and said the Central Bank should not be afraid of disappointing markets.

CHINA: Asia stocks are rising after ratings agency Standard & Poor’s raised its China growth forecasts and investors bet global central banks will unleash more stimulus measures to boost growth. S&P expects the world’s second-biggest economy to grow by 6.6% this year, up from its prior forecast of 6.35%. In 2017 it is expected to expand by 6.3%. Asia stocks are rising after ratings agency Standard & Poor’s raised its China growth forecasts and investors bet global central banks will unleash more stimulus measures to boost growth.

COMMODITIES: Brent crude held below the highs reached following a failed coup in Turkey last week as shipments continued through the vital conduit for oil from Russia and Iraq to the Mediterranean Sea. Brent for September settlement was $47.57 a barrel on the London-based ICE Futures Europe exchange, down 4 cents.

Macro Economic Indicators
Inflation rate (Y-o-Y) for June 2016,      16.50%
Monetary Policy Rate current                  12.00%
FX Reserves (Bn $) as at Jul 14, 2016,   26.346

Money Market Highlights
NIBOR (%)

O/N                               17.2133
30 Day                          15.3813
90 Day                          16.4187
180 Day                        17.5131
LIBOR (%)
USD 1 Month               0.4833
USD 2 Months             0.5705
USD 3 Months             0.6879
USD 6 Months             0.9938
USD 12 Months           1.06675

Benchmark yields
Tenor      Maturity      Yield (%)

91d            13-Oct-16        11.53
182d          19-Jan-17       12.80
364d          06-Jul-17       15.91
2y               27-Apr-17      14.13
3y               29-Jun-19      14.32
5y               13-Feb-20      14.55

Indicative Currency Exchange Rates
Bid           Offer

USDNGN           279.66         281.31
EURUSD            1.0948         1.115
GBPUSD            1.3154          1.3356
USDJPY             105.61          105.64
USDCHF            0.97865      0.9888
GBPEUR            1.1895         1.2099
USDZAR            14.2387       14.4421
JPYNGN            265.6497    265.7503
CHFNGN          284.58         286.26
EURNGN          309.54         310.91
GBPNGN           371.39          372.79

About the Author