12 May 2014, Sweetcrude, Houston, Texas – Local and international Financial market products and services update.
NIGERIA: The Petroleum Industry Bill (PIB) in its present form is too complex for a country like Nigeria and may need to be broken into a manageable state to have an easier chance of passage before the National Assembly, says Diezani Alison-Madueke, Minister of Petroleum. The PIB aims to unify all the necessary legislations in one bill and provide a clear framework for investment in Nigeria’s energy sector.
FIXED INCOME: The new one year bill issued at last week’s auction began trading in the secondary market on Friday and closed about 30bps lower than its cut-off rate at the last auction. This was in line with the move seen on the rest of curve, rallying by about 10-40bps with more weight in the longer end. The average yield on the bill curve is now 10.90%, and as such we see limited room for further compression especially in the shorter dates. Bond market continued to witness strong demand from locals’ especially on the June 2022s and March 2024s witnessing a 12bps rally. We expect the rally in the bond market to slow ahead of this week’s bond auctions where the DMO will be reopening both 2016 and 2024 bond (35bn each).”
COMMODITIES: West Texas Intermediate was steady in New York. WTI for June delivery was up 13 cents at $100.12 a barrel in electronic trading on the New York Mercantile Exchange.
FX: On Friday, we opened to a slight uptick in rates with the bulls dominating in the early trading hours, but the pair was capped at 160.50 as we retraced almost immediately. The move down took us below 161, though this was short-lived as payers emerged to take advantage of the rather attractive lows. The pair eventually settled at 161.00-161.20, as we traded the range for a while. A late appreciation of rates turned out to be unsustainable with sellers emerging at the 161.35/45 level to ensure we retraced towards opening levels again to eventually close for the week at 161.15/25. Expected offshore participation at the bond auctions this week should provide enough support for the pair to mitigate the depreciation pressure post the oil flow period, seeing the next resistance at 161.80-162 and support at 160.40-60.
US: The U.S. economy should accelerate in the second quarter to an annual growth rate of 3 percent or more, but it may not be clear for some time if the pick-up is sustainable, a Federal Reserve official said on Sunday. Federal Reserve Bank of Atlanta president Dennis Lockhart also said he expected the U.S. central bank to have run down its bond-buying program by its October or December meeting and to start raising interest rates in the second half of next year. The U.S. economy hardly grew in the first quarter but has gathered pace since. Philadelphia Fed President Charles Plosser said on Thursday he expected full-year growth of 3 percent.
CHINA: China’s fiscal revenues in April rose 9.2 percent from a year earlier to 1.2 trillion Yuan ($192.7 billion), the Ministry of Finance said on Monday, quickening from a rise of 5.2 percent in March. Fiscal revenues in the first four months rose 9.3 percent from the same period last year to 4.8 trillion Yuan, the ministry said in a statement. China’s fiscal expenditures rose 9.6 percent in the first four months from a year earlier to 4.0 trillion Yuan, the ministry said. It did not give a spending figure for April alone.
Macro economic Indicators
Inflation rate (yoy) for Mar. 2014 7.8%
Monetary Policy Rate current 12%
FX Reserves (Bn $) as at May. 05 37.958
Money Market Highlights
NIBOR (%)
O/N 10.6250
30 Day 12.4890
90 Day 13.2209
180 Day 14.0581
LIBOR (%)
USD 1 Month 0.1516
USD 2 Months 0.1913
USD 3 Months 0.2241
USD 6 Months 0.3224
USD 12 Months 0.5402
Benchmark Yields
Tenor Maturity Yield
91d 07-Aug-14 9.75
182d 09-Oct-14 10.43
364d 23-Apr-15 11.79
2y 16-Aug-16 12.03
4y 31-Aug-17 12.04
5y 29-Jun-19 12.17
Indicative Currency Exchange Rates
Bid Offer
EURUSD 1.3723 1.3825
GBPUSD 1.6824 1.6927
USDJPY 101.88 101.91
USDCHF 0.8809 0.8911
GBPEUR 1.1931 1.2033
USDZAR 10.2547 10.4608
USDNGN 160.85 161.55
JPYNGN 1.5707 1.7207
CHFNGN 187.26 192.86
EURNGN 227.56 232.76
GBPNGN 273.06 278.26
ZARNGN 14.32 18.12
Fx
Hi Low Close Prev.Close
USD/NGN 161.40/50 160.85/95 161.15/25 160.90/00