Financial market products & services update

*Financial markets.

06 March 2017, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: Nigeria’s trade balance turned positive in the fourth quarter of 2016 after exports rose by more than half, the national bureau of statistics said on Saturday, the first positive reading since the same quarter a year ago. But Africa’s largest economy shrank 1.5% over the course of the full year due to lower oil revenues and a shortage of hard currency, its first annual contraction in quarter of a century. With limited manufacturing capacity, Nigeria imports most of what it consumes. Fourth-quarter imports rose 46.4% from the previous year to 2.31 trillion naira ($7.6 billion), the statistics bureau said. But exports more than compensated for that rise, jumping 53.5% in value terms from a year earlier to 2.98 trillion naira, the statistics bureau said. The balance of trade for the fourth quarter was 671 billion Naira.
FX: The results of Thursday’s FX auction to clear backlog of FX demand for key sectors (Plant and Machinery, Agriculture, Airlines, Petroleum products) have not yet been released. We expect to get feedback from the CBN this week.

FIXED INCOME: Sentiments toward the OMO announcement on Friday was unchanged. We are looking forward to a more eventful week in the fixed income space. Money market was long N85.72bn as at Friday.

E.U: A timeline for the end of European Central Bank stimulus is taking shape among economists.
Policy makers will wait until at least June before upgrading their assessment of the risks to the euro-area recovery and won’t announce another reduction in bond purchases until September, according to most respondents in a Bloomberg survey. Tapering quantitative easing and starting to raise interest rates will take until at least the end of next year and possibly into 2019.
Despite more than three years of growth and inflation that is now nominally above his goal, ECB President Mario Draghi is pushing back against calls to reduce monetary support for the euro area.
No economists foresee any change to QE or rates on Thursday, when the Governing Council meets in Frankfurt. A minority predict a significant change in policy language or a renewed round of long-term loans to banks.

U.K: Francois Fillon’s vow to stay in the French presidential race will be tested Monday as party chieftains gather to consider his fate amid a persistent corruption scandal.
The leadership of the center-right Republican party is to meet at its Paris headquarters to discuss Fillon’s future after potential charges of embezzlement undermined his campaign and caused dozens of his top supporters to withdraw their backing. Fillon said Sunday night that he was staying in the race, after widespread speculation, that he would pull out.

COMMODITIES: Libya’s crude output dropped after clashes forced two of the country’s biggest oil ports to shut down, threatening the OPEC member’s efforts to revive the production of its most important commodity.
The North African country’s production fell to 650,000 barrels a day from about 700,000 barrels a few days ago, according to a person with knowledge of the matter, who asked not to be identified because the person isn’t authorized to speak to media.

Macro Economic Indicators
Inflation rate (Y-o-Y) for January 2017,    18.72%
Monetary Policy Rate current                      14.00%
FX Reserves (Bn $) as at Mar 02, 2017,     29,737

Money Market Highlights
NIBOR (%)
O/N                            17.6667
30 Day                       14.6468
90 Day                       19.3292
180 Day                     22.9523
LIBOR (%)
USD 1 Month            0.83444
USD 2 Months          0.91333
USD 3 Months          1.10167
USD 6 Months          1.42267
USD 12 Months        1.72400

Benchmark yields
Tenor        Maturity        Yield (%)
91d               01-Jun-17         14.87
182d            31-Aug-17          18.76
364d            01-Feb-18         22.20
2y                 29-Jun-19         16.12
3y                 13-Feb-20         16.16
5y                 27-Jan-22         15.95

Indicative Currency Exchange Rates
Bid          Offer

USDNGN     314.50        315.00
EURUSD      1.0532        1.0733
GBPUSD      1.2176         1.2378
USDJPY       113.60         113.63
USDCHF      1.00275      1.0130
GBPEUR      1.1444         1.1648
USDZAR      12.8862      13.0903
JPYNGN      2.7197         2.8203
CHFNGN     311.68         313.37
EURNGN     338.92        340.28
GBPNGN     404.78        406.18

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