26 January 2017, Sweetcrude, Houston — Local and international financial market products and services update.
NIGERIA: Nigeria’s central bank has asked banks to bid in a special currency auction to clear a backlog of dollar obligations that businesses owe, traders said on Wednesday. The central bank asked commercial lenders to submit backlog dollar demand from fuel importers, airlines, raw-materials producers, and makers of agricultural chemicals and machinery for manufacturers by 1500 GMT. Last December, the central bank sold around $1 billion on the forward market to clear a similar backlog of dollar obligations, in an effort to support production in Africa’s biggest economy. Nigeria is in its first recession in 25 years, caused by low prices for oil. That has cut the supply of dollars needed to fund imports, which the country depends on for everything from fuel to food. Nigeria’s foreign exchange reserves rose to $27.69 billion by Jan. 23, up 8.97 percent month-on-month as oil prices rose.
FX: The Naira pared back its gains from yesterday falling by 50kobo. Offers for the greenback now stand at $/NGN 497.
FIXED INCOME: Tone in bonds was strong as expected. There were sellers into the strength but the outperformer was the July 2021s. Short dated bills (<60days) moved up an average of 100bps. With the disappointing OMO results, we expect to see demand today for bills. O/N closed at 8% as expected withdrawal of liquidity had been priced in.
US: Donald Trump’s moves on infrastructure and deregulation have reignited investor confidence in the US economy, propelling stocks into record territory and sending the Dow Jones Industrial Average above 20,000. But bullish sentiment was not confined to the Dow, an idiosyncratic index that tracks just 30 popular stocks driven by companies with the highest share prices. The broader S&P 500 benchmark also hit new highs, helped by rallies in sectors directly affected by Mr Trump’s first executive actions — including requiring that domestic steel be used for US pipelines and building a wall along the Mexican border. In mid-afternoon in New York, the Dow was up 0.8 % at 20,069.15, while the S&P 500 was 0.7 % up at 2,296.05.
EMERGING MARKETS: Emerging-market governments are selling debt at close to a record pace this month, concerned about the prospect of rising U.S. interest rates and that President Donald Trump’s policies could bring uncertainty to the developing world. Governments in emerging markets have sold $22.4 billion in debt in January, threatening to surpass the high of $28.6 billion issued during the first month of 2014, when low U.S. interest rates encouraged buying of riskier assets in the developing world, according to data provider Dealogic. The majority of this debt was sold in dollars, widening the investor base by offering more liquid bonds than those sold in local currencies. But dollar-denominated debt poses risks, too, if the U.S. currency keeps rallying. That makes it more expensive for governments to pay back obligations.
COMMODITIES: Oil prices rose on Thursday, driven up by a weakening dollar, but gains were capped by plentiful supplies and inventories despite an effort by OPEC and other producers to cut output and prop up the market. Brent crude futures LCOc1, the international benchmark for oil prices, were trading at $55.59 per barrel at 0313 GMT, up 51 cents, or 0.93 % , from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $53.22 a barrel, up 47 cents or 0.89 %.
Macro Economic Indicators
Inflation rate (Y-o-Y) for December 2016, 18.55%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Jan 24, 2017, 27,760
Money Market Highlights
NIBOR (%)
O/N 7.3333
30 Day 17.8925
90 Day 19.5039
180 Day 23.0913
LIBOR (%)
USD 1 Month 0.77111
USD 2 Months 0.84694
USD 3 Months 1.03789
USD 6 Months 1.35239
USD 12 Months 1.72122
Benchmark Yields
Tenor Maturity Yield (%)
91d 27-Apr-17 14.46
182d 27-Jul-17 19.53
364d 21-Dec-17 21.24
2y 29-Jun-19 16.15
3y 13-Feb-20 16.34
5y 27-Jan-22 16.05
Indicative Currency Exchange Rates
Bid Offer
USDNGN 314.50 315.00
EURUSD 1.0631 1.0833
GBPUSD 1.2525 1.2727
USDJPY 113.78 113.81
USDCHF 0.99485 1.0050
GBPEUR 1.1663 1.1867
USDZAR 13.1651 13.3685
JPYNGN 2.7197 2.8203
CHFNGN 314.44 316.13
EURNGN 338.92 340.28
GBPNGN 404.78 406.18