09 December 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Federal Government has said it was looking the way of the International Monetary Fund, IMF, and the World Bank for some of its external borrowings to boost the economy out of recession. This came as the Debt Management Office, DMO, said, yesterday, it had raised the N1.18 trillion, which is the domestic component of the 2016 budgeted borrowing.
According to the government, both institutions have some “concessionary terms” attached to borrowing packages. A statement signed by Media Adviser to the Minister of Budget and National Planning, James Akpandem, quoted the Minister, Senator Udo Udoma, as stating this at a meeting with the Assistant Secretary for Multilateral Affairs of the Trade and Policy Department at the French Treasury, Mr Guillaume Chabert, in Abuja.
FX: Trading momentum unchanged at yesterday’s session. USDNGN traded range was $/NGN 305.00 – 315.50.
FIXED INCOME: Money market liquidity now in excess of N200bn, O/N rate closed at 3% yesterday. N68.505bn was mopped up at Yesterday’s OMO auction (the largest we have seen this week). Street still shying away from the auctions and sticking to short-dated bills. The tone in the bond market overall felt strong. There were both buyers and sellers on the short end of the bond curve, however, the long end was skewed to buyers. Most of the activity in bonds was whispered to be from some offshore and real money accounts. We expect more of the same today.
E.U.: European Central Bank policy makers from the euro area’s south argued in favour of a longer extension of asset purchases, according to people familiar with the debate.
The Governing Council members proposed continuing quantitative easing for another 12 months after March, three months more than the longest option presented by ECB Chief Economist Peter Praet at the meeting, according to the people, who asked not to be identified because the deliberations are private. An ECB spokesman declined to comment.
JAPAN: In a development that marks a win for Bank of Japan policy makers anxious to preserve a key cog of the financial system, the volume of inter-bank loans is recovering following a sharp pullback in the aftermath of the introduction of a negative rate on a portion of banks’ reserves.
Logic might dictate that no lender would extend uncollateralized credit overnight only to get repaid less the next day. But with the BOJ continuing to buy massive amounts of government bonds, banks are receiving further waves of cash from the central bank that they need to deploy in some fashion.
COMMODITIES: OPEC is likely to bring the oil market into balance by the middle of next year, but its production cut looks set to fall short of its stated goal of draining the stockpiles that are depressing prices.
The oil market will rebalance “toward the middle of next year,” according to Nigeria’s Minister of State for Petroleum Emmanuel Kachikwu, bringing an end to more than three years when supply exceeded demand. However, Bloomberg News calculations based on OPEC data show that across the whole of 2017 there will be a little overall reduction in record oil inventories.
Macro Economic Indicators
Inflation rate (Y-o-Y) for October 2016, 18.33%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Dec 07,2016, 24.970
Money Market Highlights
30 Day 15.8625
90 Day 18.3916
180 Day 21.0554
USD 1 Month 0.65417
USD 2 Months 0.75639
USD 3 Months 0.95083
USD 6 Months 1.29322
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 09-Mar-17 15.73
182d 01-Jun-17 19.24
364d 02-Nov-17 21.86
2y 30-May-18 19.35
3y 29-Jun-19 15.69
5y 15-Jul-21 15.87
Indicative Currency Exchange Rates
USDNGN 314.50 315.00
EURUSD 1.0516 1.0718
GBPUSD 1.2499 1.2701
USDJPY 114.40 114.43
USDCHF 1.01125 1.0214
GBPEUR 1.1766 1.1970
USDZAR 13.6034 13.8075
JPYNGN 2.7097 2.8103
CHFNGN 312.74 314.39
EURNGN 338.92 340.28
GBPNGN 404.78 406.18