Financial market products & services update

*Financial markets.

20 March 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigeria’s monetary and fiscal authorities must cooperate on their policies to help Africa’s largest economy to develop, the central bank governor said, according to his spokesman. Central Bank Governor Godwin Emefiele made the comments at a two-day retreat for members of the bank’s Monetary Policy Committee and the ministers for finance, the budget and investment. The closed-door meeting, which takes place about three times a year, ended on Saturday. OPEC member Nigeria is in its first recession in 25 years, largely brought on by low oil prices. Crude oil sales account for about two-thirds of government revenue. The central bank has faced criticism from investors for keeping Nigeria’s currency, the naira, at a rate some 30% above the black market, where entrepreneurs are forced to go for foreign exchange with the dollar scarce on official channels.
FX: The FX wholesale auction were released on Friday evening to the individual Banks. Interbank spot traded within $/NGN 306.50 – 375.00 as this captured the retail FX supplied by the CB for PTA, school fees and medical expenses.

FIXED INCOME: Both bills and bonds were mostly quiet on Friday. Decent flows from corporate accounts looking to buy bills. Overall tone on Friday was skewed to the buyers and we expect to start this week on that note. MPC outcome on Tuesday – expectation is for the committee to maintain current policy stance. O/N closed above 14% because of funding for both bond and FX auctions.

COMMODITIES: Oil declined as an increase in U.S. drilling countered the prospect of OPEC extending an output-reduction deal.
Futures lost as much as 1.1% in New York after gaining 0.6% last week. Producers added more oil rigs to U.S. fields last week, extending a drilling surge into a 10th month, Baker Hughes Inc. said. Saudi Arabia is ready to extend cuts if supplies stay above the five-year average, Energy Minister Khalid Al-Falih said in an interview on Bloomberg Television.
Oil traded below $50 a barrel last week, near the lowest levels since November, as near-record U.S. crude stockpiles and increasing production weighed on the output reductions by the Organization of Petroleum Exporting Countries and non-OPEC nations.

U.K: Mark Carney is set to see inflation above the Bank of England’s 2% target for the first time since the year he became governor, data to be published on Tuesday will show. Consumer prices rose 2.1% in February, according to a Bloomberg survey of 32 economists, fuelled by the pound’s slump and higher energy prices. While the BOE has said it can, within limits, tolerate inflation above its goal, policy maker Kristin Forbes last week voted for an interest-rate increase and some others indicated they may not be far behind her.

E.U: German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe called for a concerted effort to defend free trade, saying global markets can be both open and fair.
Two days after U.S. President Donald Trump and Merkel held inconclusive talks at the White House, the German and Japanese leaders opened the CeBIT technology show in Hanover, Germany, by advocating a trade accord between Japan and the European Union as a way to underscore the benefits of an interconnected global economy.
Talks on an EU-Japan accord began in 2013 with the goal of lowering barriers to trade and investment on both sides.

Macro Economic Indicators
Inflation rate (Y-o-Y) for February 2017,     17.80%
Monetary Policy Rate current                         14.00%
FX Reserves (Bn $) as at Mar 16, 2017,        30.303

Money Market Highlights

O/N                            15.9583
30 Day                       17.1518
90 Day                       20.1177
180 Day                     23.0725
USD 1 Month            0.97611
USD 2 Months          1.02167
USD 3 Months          1.15178
USD 6 Months          1.43156
USD 12 Months        1.72400

Benchmark Yields
Tenor       Maturity       Yield (%)

91d              15-Jun-17       17.09
182d           14-Sep-17        19.61
364d          01-Mar-18       22.08
2y               29-Jun-19       15.76
3y               13-Feb-20       16.09
5y               15-Jul-21         16.24

Indicative Currency Exchange Rates
Bid         Offer

USDNGN            314.50        315.00
EURUSD             1.0660       1.0862
GBPUSD             1.2303        1.2507
USDJPY              112.71         112.74
USDCHF            0.99315      1.0033
GBPEUR            1.1424         1.1628
USDZAR            12.5763      12.7798
JPYNGN            2.6797        2.7803
CHFNGN          307.70        309.39
EURNGN          334.14        335.50

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