31 October 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The World Bank and International Monetary Fund, IMF, have piled pressure on the Federal Government to come up with an economic blueprint, if its drive for foreign loans was not to be stalled. Vanguard gathered that officials of both financial institutions have questioned the Minister of Finance and her team over the absence of a blueprint for which the loans being sought would be utilized. Sources at the Presidency said at the last IMF/World Bank Group Annual Meetings, that the Nigeria team was asked to produce an economic blueprint for which the IMF/World Bank Group will offer support.
FX: The Central Bank on Friday advised all authorized dealers that $814m worth of forwards were bid at the last auction held on October, 17 2016 and only $313m was filled. Hence, they will sell the balance of $500m through another 60 and 90 days forwards.
FIXED INCOME: Slight deviation by CBN from the regular trend on Friday. Three maturities were floated at the OMO auction instead of two (104-day, 174-day and 356day bills). T-Bill market sold off some more. Bond market also saw sellers too. At the OMO, there was no sale on the 104day bill while N52.6bn was sold almost equally across the other two bills. Appetite at the auction remains lukewarm as the announcement of the FX intervention results will put some strain on money market liquidity. We expect the tone at the start of this week to be bearish.
U.K: Mark Carney’s policy announcement may not be the most important one he makes this week. With growth holding firm against Brexit and the pound’s plunge stoking fears of a surge in prices, economists say that means a once-planned interest rate cut is off the table on Nov. 3. But the Bank of England governor may also be about to announce how long he will stay in the role, a decision that has ramifications for the stewardship of the economy at a time of unprecedented change.
Over the weekend, some newspapers reported that Carney was preparing to leave in 2018, sticking to the five years in the role agreed when he was appointed — while the Financial Times said he’ll serve a full term through 2021.
U.S: The dollar edged up on Monday, staying on track for a monthly gain, but remained shy of recent highs as investors became less sure that Hillary Clinton would win the U.S. presidential election after the FBI’s new probe into her private email use.
The dollar index, which tracks the greenback against a basket of six major currencies, added 0.1% to 98.418. DXY =USD, up 3.1% for October and likely to match May’s gain, but below last Tuesday’s nearly nine-month high of 99.119.
The dollar tumbled late on Friday after the U.S. Federal Bureau of Investigation revealed its probe of newly found emails related to Clinton’s use of a private server, rocking the Democratic candidate’s campaign just days ahead of the Nov. 8 election.
COMMODITIES: Oil declined for a second day as OPEC’s internal disagreements undermined efforts among major suppliers to reach an agreement in Vienna on trimming output to support prices.
Futures fell as much as 1.1% in New York after sliding 2.1% at the end of last week. The Organization of Petroleum Exporting Countries ended a meeting on Friday without reaching a deal on country quotas, according to delegates who took part in the discussions. Non-OPEC nations finished talks with the group on Saturday without any supply commitments, Brazil’s Oil and Gas Secretary Marcio Felix said. Brazil attended as an observer.
Macro economic Indicators
Inflation rate (Y-o-Y) for September 2016, 17.90%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Oct 27,2016, 23.947
Money Market Highlights
30 Day 18.9606
90 Day 20.0592
180 Day 21.1933
USD 1 Month 0.5326
USD 2 Months 0.6722
USD 3 Months 0.8859
USD 6 Months 1.2582
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 02-Feb-17 17.38
182d 04-May-17 19.71
364d 21-Sep-17 22.03
2y 30-May-18 18.60
3y 29-Jun-19 14.63
5y 15-Jul-21 14.96
Indicative Currency Exchange Rates
USDNGN 314.00 315.00
EURUSD 1.0858 1.1063
GBPUSD 1.2081 1.2277
USDJPY 104.90 104.93
USDCHF 0.98355 0.9936
GBPEUR 1.1005 1.1209
USDZAR 13.6139 13.8150
JPYNGN 2.9597 3.0603
CHFNGN 318.69 320.38
EURNGN 345.57 346.94
GBPNGN 400.35 401.75