Financial market products & services update

*Financial markets.

*Financial markets.

05 October 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Federal Government plans to spend an estimated N6.812tn as its budget for 2017.
The figure is about 13.3% or N806bn above the N6.06tn budgeted for 2016. These details were contained in the 2017-2019 Medium-Term Expenditure Framework and Fiscal Strategy Paper, which President Muhammadu Buhari forwarded to the National Assembly on Tuesday.
The President wrote to the Speaker of the House of Representatives, Mr. Yakubu Dogara, attaching the MTEF and the FSP documents.
He explained that he was complying with the provisions of the Fiscal Responsibility Act 2007, adding that his action meant that the details of the 2017 budget would soon be laid before the legislature.

FX: Spot market for the week kicked off this week with the same momentum. The trading range for yesterday $/NGN 303.50 – 329.00.

FIXED INCOME: Market opened the new week and month on a bullish trend for both T-bills and bonds. There was some selling interest towards market close yesterday. DMO sent out the auction circular yesterday, it showed government offer the 21s, 26s and 36s again. Total borrowing however dropped to 105bn from 120bn at the last auction. The 2026s and 2036s were most active maturities in the market. T-bills rally was mainly in the 1 – 4 months bucket, The expected OMO maturities of 160bn on Thursday provided encouragement to buy in the market.

U.S: The U.S. economy is not in danger of overheating, and the Federal Reserve should continue its data-dependent approach to another interest rate hike, the International Monetary Fund chief economist Maurice Obstfeld said on Tuesday.
Obstfeld told a news conference that the Fed’s decision not to go for a second rate hike in September “was a very appropriate balancing of the risks in the economy.”
“At the moment, inflation is below their target levels, wage pressures are moderate, and so there doesn’t seem to be a great danger of overheating,” Obstfeld said.

GHANA: Ghana’s economic growth in 2016 will slow to the lowest rate in more than two decades as uncertainty over the resumption of oil and gas output at a key field weighs on the country’s prospects for next year, according to the International Monetary Fund.
The IMF issued its forecasts for Ghana after the country’s gross domestic product expanded at 2.5% in the three months through June as defectson the FPSO Kwame Nkrumah, the vessel used for production, storage and offloading crude at the Jubilee oil field, adversely affected oil and gas output. The government said in July that growth will accelerate to between 4.1% and 4.3% this year.

COMMODITIES: Oil resumed its advance as weekly industry data signaled U.S. crude stockpiles declined, trimming a supply glut.
Futures rose as much as 1.3% in New York after slipping 0.3% Tuesday. Inventories dropped by 7.6 million barrels last week, the American Petroleum Institute was said to report. Energy Information Administration data Wednesday is forecast to show stockpiles increased. A deal between OPEC and non-members could trim output by 1.2 million barrels a day and boost prices by as much as $15 a barrel, according to Venezuela’s oil minister.

Macro Economic Indicators
Inflation rate (Y-o-Y) for August 2016,       17.61%
Monetary Policy Rate current                       14.00%
FX Reserves (Bn $) as at Sep 29,2016,       24.566

Money Market Highlights

O/N                           14.8333
30 Day                      18.9013
90 Day                      19.8389
180 Day                    20.3450
USD 1 Month          0.5283
USD 2 Months       0.6490
USD 3 Months       0.8578
USD 6 Months       1.2477
USD 12 Months     1.06675

Benchmark Yields
Tenor        Maturity       Yield (%)

91d              05-Jan-17         16.02
182d           06-Apr-17         19.86
364d           21-Sep-17          22.38
2y                30-May-18        18.71
3y                29-Jun-19         14.63
5y                15-Jul-21           14.93

Indicative Currency Exchange Rates
Bid           Offer

USDNGN          314.00         315.00
EURUSD           1.1124          1.1326
GBPUSD           1.2682         1.2883
USDJPY            102.82         102.89
USDCHF          0.97185       0.98321
GBPEUR           1.1239          1.1442
USDZAR           13.6530       13.8561
JPYNGN           3.0097         3.1103
CHFNGN          321.78         323.47
EURNGN         351.00         352.36
GBPNGN         411.55           412.94

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