03 August 2015, Sweetcrude, Lagos – Local and international financial market products and services update.
FX: No significant change in the market as the two way quote FX market remains shut. Special auction funds still maintained at 196.00/197.00.
FIXED INCOME: Last week say quite some activity in the bonds market. There was some reversal in sentiments during the week as we saw bullish activities. The trend was however reversed at week close leaving week on week levels almost flat. With announcement of OMO auctions liquidity is gradually leaving the system, causing some weakness on the short dated bills. Two tenors were floated on Friday at the OMO window but stop rate of the longer tenored bill (286DTM) moved up from average 15.3% yield seen this week to 15.725%. This increased the general weakness already seen in the market. O/N rates closed at 7%.
COMMODITIES: Iran can boost oil production in one week after international sanctions are lifted, and OPEC’s refusal to accommodate Iran in export markets would result in lower crude prices, Oil Minister Bijan Namdar Zanganeh said. Production can increase by 500,000 barrels a day within a week after sanctions end and by 1 million barrels a day within a month following that, state-run Islamic Republic News Agency reported. Brent crude, the global benchmark, fell about 50 percent last year and dropped 0.7 percent to $51.83/bbl.
NIGERIA: The Central Bank of Nigeria (CBN) has said it may increase the list of items excluded for funding from the official foreign exchange (forex) market as it seeks to reduce pressure on the naira and preserve the country’s external reserves. CBN Governor, Mr. Godwin Ifeanyi Emefiele, said this during an exclusive interview with THISDAY in Lagos at the weekend. The policy, according to the central bank, was also designed to facilitate the resuscitation of domestic industries and improve employment generation. But some of the affected importers and members of the Lagos Chamber of Commerce and Industry (LCCI) have continued to kick against the policy.
US: Imagine there were a simple policy that would spur economic growth, lower gas prices and please international allies. This policy exists: removing the United States’ irrational and outdated ban on exporting domestically produced crude oil. A bill lifting the ban passed a Senate committee last week, a day after House Speaker John Boehner (R-Ohio) announced that he, too, supported bringing the country fully into the international oil market. Congress imposed the ban amid the oil shocks of the 1970s in a desperate move to tame gasoline prices. Lately, the situation has changed: U.S. crude oil production rocketed up 74 percent from 2008 through 2014. That has led to a glut here at home, where crude oil is selling at a discount relative to world prices. Yet the ban’s superficial logic still appears to hold some power: Lifting the export restrictions, one might imagine, would send more oil abroad, which would raise gasoline prices here and hurt the economy.
EUROPE: The Europe’s economy has been hit so hard by five years of crisis that 1.6 percent growth makes Germany look like a powerhouse and Spain can boast of being a job-creating machine with 23 percent unemployment. The tepid recovery is just fine with bond investors. They are charging Italy and Spain less than 2 percent to borrow for 10 years, compared with more than 7 percent at the height of the
crisis. Euro-area economic confidence reached a four-year high last month. But the cheaper oil, declining euro and European Central Bank money spurring an upturn in the economy haven’t answered key questions about the currency region’s future. Greece’s membership still hangs in the balance and a political backlash in both the richer north and poorer south makes steering the economy even harder.
Macro Economic Indicators
Inflation rate (YoY) for Nov., 2014 9.20%
Monetary Policy Rate current 13.00%
FX Reserve (Bn $) as at January 09 2015 31.365
Money Market Highlights
NIBOR (%)
O/N 7.7500
30 Days 12.9212
90 Days 15.6979
180 Days 16.7083
LIBOR (%)
USD 1 Month 0.1918
USD 2 Months 0.2495
USD 3 Months 0.3086
USD 6 Months 0.4899
USD 12 Months 0.8285
Benchmark Yields
Tenor Maturity Yield (%)
91d 29-Oct-15 14.01
182d 21-Jan-16 14.42
364d 02-Jun-16 14.53
2yr 27-Apr-17 14.81
3yr 29-Jun-19 14.93
5yr 13-Feb-20 14.71
Indicative Currency Exchange Rates
Bid Offer
USDNG 196.50 199.50
EURUSD 1.0868 1.1070
GBPUSD 1.5489 1.5691
USDJPY 124.16 124.19
USDCHF 0.96136 0.9715
GBPEUR 1.4111 1.4315
USDZAR 12.6271 12.8305
JPYNGN 160.3597 160.4603
CHFNGN 204.99 206.68
EURNGN 217.24 219.60
GBPNGN 309.40 310.79
ZARNGN 14.69 16.61