07 November 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Federal Government and the World Bank have signed a Partial Risk Guarantee (PRG) agreement for the supply of gas to the $500 million Calabar gas plant to boost energy supply by 500 megawatts. Vice President Yemi Osinbajo, who witnessed the signing of the agreement at the Presidential Villa, said the event is very significant for the country as it would encourage investment in gas infrastructure.
He said government expected that going by the current power situation, the investment was worth celebrating. He said the government was grateful to the World Bank and the investors in the Calabar plant for coming to the aid of the country in its drive to increase power supply.
FX: Spot trading in the interbank market had traded the same lacklustre way all through last week. Friday traded range $/NGN 304.50-379.55.
FIXED INCOME: With no OMO maturity till the November 17, 2016, shorted dated bills rallied further. T-Bills with tenors less than 70days dropped an average of 125bps. the Bond market was extremely quiet until some last minute demand on the June 19s. We don’t expect much change this week. O/N rates closed at 15%.
U.S: The dollar’s surge after the Federal Bureau of Investigation cleared Hillary Clinton of committing a crime sent the greenback close to levels that the most-accurate currency forecasters say it would reach if she won Tuesday’s presidential election.
The dollar rose as much as 1.4% to 104.58 yen after the FBI said it maintains the view that the former Secretary of State’s handling of her e-mails wasn’t a crime. Within 24 hours of a win for Clinton, the greenback will advance to 105.25, according to the average forecast from a survey of the top 10 foreign-exchange analysts in Bloomberg’s third-quarter rankings. A majority said the dollar would plunge past 100 yen if Donald Trump wins.
JAPAN: Japan is concerned about currency volatility after the U.S. presidential election and hasn’t ruled out market intervention, said Masatsugu Asakawa, vice minister for international affairs at the Ministry of Finance.
Asakawa, who is responsible for currency policy, said Japanese officials would be closely watching markets after Tuesday’s vote, but declined to comment on specific price levels or possible intervention operations.
“We haven’t ruled out intervention,” he said, speaking in an interview with Bloomberg on the sidelines of an International Monetary Fund seminar in Tokyo. “I think FX policy is an effective tool in macroeconomic stability. We’ll take action if necessary.
COMMODITIES: Russia, the world’s biggest energy producer, is “on board” with an OPEC agreement to limit crude oil production to help re-balance the market, according to OPEC Secretary General Mohammed Barkindo.
OPEC producers remain committed to an agreement reached last month in Algiers to trim output, and cooperation from non-OPEC producers will help bring the oil market back into balance, Barkindo told reporters at an energy conference in Abu Dhabi. Russia is due to join OPEC for talks later this month in Vienna, where OPEC will convene for its bi-annual meeting.
Macro Economic Indicators
Inflation rate (Y-o-Y) for September 2016, 17.90%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Nov 03,2016, 23.968
Money Market Highlights
30 Day 17.8696
90 Day 19.0987
180 Day 20.1759
USD 1 Month 0.5353
USD 2 Months 0.6681
USD 3 Months 0.8826
USD 6 Months 1.2454
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 02-Feb-17 17.12
182d 04-May-17 19.24
364d 21-Sep-17 22.11
2y 30-May-18 18.67
3y 29-Jun-19 14.64
5y 15-Jul-21 15.08
Indicative Currency Exchange Rates
USDNGN 314.00 315.00
EURUSD 1.0956 1.1157
GBPUSD 1.2297 1.2499
USDJPY 104.40 104.43
USDCHF 0.97295 0.9831
GBPEUR 1.1112 1.1316
USDZAR 13.4253 13.6286
JPYNGN 2.9697 3.0703
CHFNGN 323.22 324.91
EURNGN 345.57 346.94
GBPNGN 400.35 401.75