27 September 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: A dispute between Nigeria’s monetary and fiscal policymakers over how to lift the economy out of its worst slump in more than two decades may delay a recovery in Africa’s most populous country.
Central bank Governor Godwin Emefiele last week ignored calls by Finance Minister Kemi Adeosun to cut borrowing costs and kept the key interest rate unchanged at 14%, hours after she said in a television interview looser policy is necessary to stimulate the economy. Emefiele also called out the government for its inadequate efforts to boost growth, saying monetary policy alone can’t get the economy out of stagflation and that “complementary fiscal policies” are needed to resuscitate output and consumption.
FX: The week started off with no difference from the previous week. Traded range for yesterday $/NGN 304.50-325.50. The opening levels $/NGN 314- 315.00.
FIXED INCOME: It was relatively quite in both bonds and bills for the better yesterday. Roughly the first hour in bonds was active and it was skewed to the sellers. T- Bill market traded mixed as everyone basically waited to see if there would be any OMO auction. Eventually, there was none but with money market fairly liquid, the focus will still be on any OMO announcements.
U.S: Hillary Clinton and Donald Trump levelled sharp and personal charges and counter-charges over trade, the U.S. economy, race and foreign policy in their first face-to-face debate, an event that put on display their starkly different personalities and visions of the nation’s future.
From the first question posed by moderator Lester Holt, the debate devolved into an exchange of accusations and blame as Trump and Clinton reached into each others’ past statements and records. On most policy issues they fell back on their standard campaign stances, offering no new proposals for how they would deal with the country’s challenges.
The debate Monday night at Hofstra University in New York ended as it began with testy exchanges.
U.K: The Bank of England will start purchasing corporate bonds on Tuesday, opening another front in efforts to cushion the U.K. economy from potential shocks following the nation’s vote to leave the European Union.
The central bank will seek to buy notes issued by companies including General Electric Co., United Utilities Group Plc and Rio Tinto Plc, according to a list distributed last week. Purchases will be made through reverse auctions starting at 11 a.m. in London.
The BOE’s 18-month plan to buy 10 billion pounds ($13 billion) of highly rated, non-financial company notes has pushed yields to record lows as investors have snapped up bonds in anticipation of central bank demand.
COMMODITIES: Oil halted gains after two days of price swings as investors weigh the chance of OPEC reaching an output deal to stabilise markets when the group meets Wednesday in Algiers.
Futures fell 0.4% in New York. Prices rebounded 3.3% Monday after dropping Friday by the most in more than two months. The U.A.E. supports a deal to freeze output if other nations agree, but production cuts are not up for discussion, Oil Minister Suhail Al Mazrouei said. Nigerian Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu said “surely there will be” an accord. Prices may tumble below $20 if no deal is reached, according to Venezuela’s oil minister.
Macro Economic Indicators
Inflation rate (Y-o-Y) for July 2016, 17.13%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Sep 23, 2016, 24.722
Money Market Highlights
30 Day 18.2391
90 Day 19.1811
180 Day 20.4941
USD 1 Month 0.5222
USD 2 Months 0.6570
USD 3 Months 0.8529
USD 6 Months 1.2447
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 29-Dec-16 17.51
182d 23-Mar-17 19.08
364d 31-Aug-17 22.53
2y 30-May-18 18.74
3y 29-Jun-19 14.58
5y 15-Jul-21 14.84
Indicative Currency Exchange Rates
USDNGN 314.00 315.00
EURUSD 1.1139 1.1341
GBPUSD 1.2869 1.3071
USDJPY 100.54 100.60
USDCHF 0.96495 0.9750
GBPEUR 1.1437 1.1641
USDZAR 13.4456 13.6487
JPYNGN 3.0897 3.1903
CHFNGN 358.38 330.83
EURNGN 351.00 352.36
GBPNGN 411.55 412.9