Financial market products & services update

*Financial markets.

06 April 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: The International Monetary Fund (IMF) warned Nigeria its economy needs urgent reform in a report published on Wednesday that highlighted the risks to growth for the recession-hit country and the dangers of a volatile foreign exchange market. The document, a report from IMF staff which Reuters saw an earlier version of last month, outlines a raft of failings in Nigeria’s handling of Africa’s largest economy and could affect talks over at least $1.4 billion in international loans. It strikes a more critical tone than the Fund’s board adopted in a statement last week, though that also said Nigeria should lift its remaining foreign exchange restrictions and scrap its system of multiple exchange rates.

FX: Interbank trading remains muted with the CBN maintaining its daily injection of $1.5m into the markets. The Naira remained stable in the parallel market following successive FX interventions by the CBN.

FIXED INCOME: The release of the bond calendar has come and gone but tone in bonds is still bearish. Volumes from buy-side clients very low and total market traded volume was c.N10bn yesterday. Focus remains on the July 21s, Jan 26s and Mar 36s since the 2027s and 2037s won’t trade yet. Bill market is officially back in full swing. Street resumed from the compulsory break with demand on the May bills (basically short covering).

E.U.: The Mario Draghi sought to quash the idea that the European Central Bank will begin tightening policy sooner than planned, saying that inflation in the euro area isn’t strong enough for officials to start signaling such a shift.
“I do not see cause to deviate from the indications we have been consistently providing in the introductory statement to our press conferences,” the ECB President said in a speech in Frankfurt on Thursday. “We have not yet seen sufficient evidence to materially alter our assessment of the inflation outlook — which remains conditional on a very substantial degree of monetary accommodation.”

South Africa: Two former members of South African President Jacob Zuma’s administration resigned as lawmakers for the ruling African National Congress before this month’s debate of a motion of no confidence in the nation’s leader.
Former Transport Minister Dipuo Peters and ex-Deputy Finance Minister Mcebisi Jonas resigned as members of parliament, effective March 31, the National Assembly said in emailed statements. Zuma fired Peters and Jonas in a cabinet reshuffle announced shortly after midnight the same day.
The resignations may boost Zuma’s chances of surviving the no-confidence motion called by the two main opposition parties. The vote is scheduled for April 18 in the National Assembly, where the ANC has a 62% majority.

COMMODITIES: Oil stalled a week-long rally following a surprise gain in U.S. crude supplies, calling into question the ability of OPEC-led production cuts to drain a global surplus.
Futures lost as much as 0.7% in New York after rising 6.8% the previous seven days. U.S. output rose for a seventh week and inventories expanded to a fresh record, government data showed Wednesday.
The increase in U.S. stockpiles is reviving concern they’ll counter output curbs led by the Organization of Petroleum Exporting Countries. Oil rallied back above $50 a barrel a week ago after some OPEC nations supported a possible extension to their six-month deal, while production halts in the U.K.

Macro Economic Indicators
Inflation rate (Y-o-Y) for February 2017        17.78%
Monetary Policy Rate current                           14.00%
FX Reserves (Bn $) as at Apr 04, 2017            30.318

Money Market Highlights

O/N                           11.0417
30 Day                      16.9388
90 Day                      21.2117
180 Day                    23.4241
USD 1 Month           0.98611
USD 2 Months        1.02833
USD 3 Months        1.14983
USD 6 Months        1.42572
USD 12 Months      1.72400

Benchmark Yields
Tenor      Maturity     Yield (%)

91d             06-Jul-17       18.20
182d           05-Oct-17      19.99
364d          22-Mar-18     22.40
2y               29-Jun-19      15.80
3y               13-Feb-20      15.77
5y               15-Jul-21        15.83

Indicative Currency Exchange Rates
Bid         Offer

USDNGN           314.50       315.00
EURUSD           1.0566       1.0768
GBPUSD            1.2379       1.2582
USDJPY             110.75       110.77
USDCHF            0.99915    1.0093
GBPEUR            1.1598       1.1800
USDZAR            13.6933    13.8969
JPYNGN            2.7197       2.8203
CHFNGN           304.52     306.31

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