21 May 2015, Sweetcrude, Houston – Local and international financial market products and services update.
FX: No change in the special auction modalities. CB sold an estimated $20m yesterday, maintaining the intervention rate at $/NGN 197.00. The interbank market remained highly illiquid.
FIXED INCOME: T-bills continued to trend higher today especially on the short end of the curve owing mostly to the expected outcome of the CRR decision rather than the primary auction [results still pending]. T-bills yields inched up by about 30bps. Bonds are not reacting in the same quantum as bills, though in the same trend, yield marginally pushed up by 3bps. FAAC flows came into the market yesterday about $201bn and money market liquidity up by NGN253bn crashing overnight from above 50% to 10.50%.
COMMODITIES: Oil held gains as investors weighed easing U.S. crude stockpiles against signs that producers will boost drilling. Oil rebound from a six-year low has faltered amid speculation that rising prices will encourage U.S. production. Crude stockpiles near the highest level in 85years will continue to weigh on the market.
NIGERIA: The direction and programmes of the incoming administration of Major General Muhammadu Buhari (rtd) appears to be emerging with the guide being offered in the form of start-up reform marshal plan by a former British Prime Minister, Mr Tony Blair, who urged him to carry out a complete overhaul of the Nigerian National Petroleum Corporation (NNPC) and solve the problematic petroleum subsidy regime within the first 100 days of assuming office. The direction and programmes of the incoming administration of Major General Muhammadu Buhari (rtd) appears to be emerging with the guide being offered in the form of start-up reform marshal plan by a former British Prime Minister, Mr Tony Blair, who urged him to carry out a complete overhaul of the Nigerian National Petroleum Corporation (NNPC) and solve the problematic petroleum subsidy regime within the first 100 days of assuming office.
US: The dollar rose against the euro as minutes from the Federal Reserve’s last meeting bolstered bets the U.S. will tighten monetary policy before central-bank officials in Europe. The greenback traded close to the highest level in three weeks versus the shared currency as the release showed Fed policy makers expect the American economy to rebound from a first-quarter slowdown, while indicating a June rate increase is unlikely. The gains come after the European Central Bank reaffirmed its commitment to quantitative easing.
CHINA: When it comes to spiking the global punch bowl, Zhou Xiaochuan doesn’t come close to central bankers in the U.S. or Europe. After central bank stimulus from the Federal Reserve and European Central Bank had a ripple effect in foreign financial markets, economists are advising investors not to expect a similar lift as Zhou’s People’s Bank of China cuts interest rates and encourages banks to lend. For one thing, China’s stimulus has so far proved weaker than that of the Fed or ECB. The stimulus which has been injected is also unlikely to reduce the cost of risk as much as similar actions did elsewhere. When the Fed cut its benchmark to about zero, for example, market borrowing costs also fell, helping the many global companies that borrow in dollars. By comparison, few international firms raise funds in the yuan, so the PBOC won’t lower the cost of equity as much worldwide.
Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014 8.70%
Monetary Policy Rate current 13.00%
FX Reserve (Bn $) as at January 09 2015 29.763
Money Market Highlights
NIBOR (%)
O/N 53.6667
30 Days 14.7283
90 Days 15.6718
180 Days 17.0153
LIBOR (%)
USD 1 Month 0.1868
USD 2 Months 0.2324
USD 3 Months 0.2810
USD 6 Months 0.4155
USD 12 Months 0.7276
Benchmark Yields
Tenor Maturity Yield (%)
91d 06-Aug-15 11.57
182d 15-Oct-15 14.04
364d 05-May-16 15.21
2yr 27-Apr-17 13.78
3yr 29-Jun-19 13.70
5yr 13-Feb-20 13.61
Indicative Currency Exchange Rates
Bid Offer
USDNG 196.00 199.50
EURUSD 1.0986 1.1188
GBPUSD 1.5392 1.5595
USDJPY 121.00 120.03
USDCHF 0.9347 0.9448
GBPEUR 1.3872 1.4077
USDZAR 11.8522 12.0564
JPYNGN 164.4000 164.5200
CHFNGN 215.03 216.72
EURNGN N/A N/A
GBPNGN N/A N/A
ZARNGN N/A N/A