02 August 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The country’s earnings from crude oil export have continued to fall, as latest data from the Central Bank of Nigeria showed that the volume of crude export dropped by 10.23 million barrels in the month of May.
At the official exchange rate of N315.5 to a dollar, and an average of $47.59 per barrel of crude during the review period, Nigeria’s earnings from the export of the commodity dropped by N153.5bn in May.
The country’s crude oil export opened at 1.45 million barrels per day or 44.95 million barrels in the month of January, but it recorded declines in the preceding months and reduced to 0.9 million b/d or 27.9 million barrels in May. In April, Nigeria’s crude export stood at 1.23 million b/d, but this dropped by 330,000 b/d in May. According to the CBN, the drop in oil export was largely due to the destruction of oil and natural gas infrastructure in the Niger Delta by militants.
FX: Liquidity in the interbank market continues to be scarce outside of the CBN Intervention. Indicative closing range yesterday – $/NGN 315.00 – 324.00.
FIXED INCOME: The CBN continued its aggressive liquidity mop up. Yesterday’s session in the secondary market was all about dealers trying to raise liquidity to fund the assets being purchased at the OMO. Basically, only the short dates (<75days) were traded and they moved up by an average of 100bps. OMO results showed that N97.44bn was sold on the 353-day paper at a yield of 22.53% and N72.90bn of the 185day paper was sold at 19.80% yield. Street appears to be happy to hold the T-bills CBN is issuing because of the attractive levels.
JAPAN.: Japan’s government is set to announce 4.6 trillion yen ($45 billion) in extra spending for the current fiscal year, according to a draft of the plan being discussed by ruling party lawmakers ahead of a cabinet meeting later Tuesday.
The spending is part of what Prime Minister Shinzo Abe has flagged as a 28 trillion yen stimulus package aimed at bolstering the economy over several years without abandoning targets to cut borrowing.
Abe revealed the overall size of the package in a speech last week, saying more investment was needed to expand the world’s third-largest economy. He said funds would be used to provide better port facilities for cruise ships and accelerate the construction of a high-speed maglev train line.
U.K: Six weeks after Britain’s vote to leave the European Union sent shock waves across the nation, on Thursday the Bank of England governor will present a detailed assessment of what it means for the economy as well as his plan of action. With initial reports showing the U.K. may be headed for recession, he’ll need to balance a realistic picture of what’s in store against the prospect of being labeled a doom-monger. The Monetary Policy Committee’s first post-Brexit analysis is set to drive its debate over how to tackle weaker growth and faster inflation. With business and consumer sentiment faltering, the pound slumping and industries from airlines to manufacturers warning of a negative fallout, economists expect Carney to unveil a suite of stimulus.
COMMODITIES: Oil traded near $40 a barrel before weekly U.S. government stockpile data and after falling into a bear market on concern the global supply glut will persist.
Futures added 0.4% in New York after dropping below $40 on Monday for the first time since April. While crude and gasoline inventories are forecast to have declined, they will remain at the highest seasonal level in at least two decades. Nigeria has resumed payments to former militants as the government seeks a cease-fire after attacks cut output to the lowest since 1989.
Macro Economic Indicators
Inflation rate (Y-o-Y) for June 2016, 16.50%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Jul 28, 2016, 26.209
Money Market Highlights
30 Day 15.7626
90 Day 17.7146
180 Day 20.3807
USD 1 Month 0.4959
USD 2 Months 0.6074
USD 3 Months 0.7591
USD 6 Months 1.1117
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 03-Nov-16 18.94
182d 02-Feb-17 20.12
364d 06-Jul-17 22.73
2y 30-May-18 18.89
3y 29-Jun-19 15.49
5y 13-Feb-20 15.33
Indicative Currency Exchange Rates
USDNGN 318.00 323.50
EURUSD 1.1097 1.1299
GBPUSD 1.3096 1.3299
USDJPY 101.69 101.72
USDCHF 0.96115 0.9712
GBPEUR 1.1684 1.1888
USDZAR 13.8732 14.0787
JPYNGN 3.1460 3.1471
CHFNGN 330.37 332.05
EURNGN 357.65 359.00
GBPNGN 371.39 372.79