22 March 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigeria’s distributable government revenues fell to 429.127 billion naira in February from 465.19 billion naira in January due to lower oil prices and attempts to sabotage its oil pipelines, a government statement said on Tuesday. Distributable revenue is government income that is shared at various levels of state including the federal government, state governments and local government councils. Average oil prices fell to $44.74 from $49.57 per barrel in February, the statement said. “Production diminished during the period due largely to leakages in the pipelines arising from sabotage,” it added. OPEC member Nigeria, which last year entered its first recession in a quarter of a century, relies on crude oil sales for two-thirds of its government revenue but has been hit hard by the fall in global crude prices since mid-2014.
FX: No changes on MPC yesterday – all parameters held. CB however advised current stance on FX will be sustained with further convergence between parallel and interbank rates still expected based on such action.
FIXED INCOME: Demand persisted in bonds ahead of the MPC meeting yesterday. All offers across the bond curve were sub 16% for the first time this year. Bills on the other hand sold off as funding for Monday’s FX auction left money market with net borrowers of naira. O/N quotes started off as high as 100% before closing between 50-70%. There were intermittent profit takers in bonds (some whispered to be from offshore accounts) but overall tone was strong. We expect a soft start today in bonds as moves in the last 2 days have been relatively aggressive.
COMMODITIES: Brent oil extended losses toward $50 a barrel as industry data showed U.S. stockpiles expanded last week, raising speculation surging supplies are offsetting output cuts from OPEC and other producers.
Futures slid as much as 0.8%in London after falling 1.3% Tuesday. U.S. inventories rose by 4.53 million barrels last week, the American Petroleum Institute was said to report. Government data Wednesday is forecast to show stockpiles climbed to a record, according to a Bloomberg survey.
CHINA: China’s central bank injected hundreds of billions of Yuan into the financial system after some smaller lenders failed to make debt payments in the interbank market, according to people familiar with the matter.
Tuesday’s injections followed missed interbank payments on Monday, the people said, asking not to be identified because the matter isn’t public. The institutions that missed payments included rural commercial banks, according to three traders who asked not to be identified. One said a borrower failed to repay an overnight repo of less than 50 million Yuan ($7.3 million).
FRANCE: Marine Le Pen seems unlikely to become the next president of France, though strange things have happened. If the National Front were to overcome numerous hurdles — most of which still seem insurmountable — it would purportedly introduce a new currency.
In the long-term, the French economy could probably benefit from a lower exchange rate, though it wouldn’t have as many advantages as Le Pen suggests. In any case, Germany’s large trade surplus seems more to blame than the monetary policy of the European Central Bank. Europe’s largest economy could cement the foundation of the euro — and take some of the wind out of Le Pen’s sails — by spending more to reduce its accumulation of foreign assets and weaken the value of the currency.
Macro Economic Indicators
Inflation rate (Y-o-Y) for February 2017, 17.80%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Mar 20, 2017, 30.352
Money Market Highlights
30 Day 16.7394
90 Day 21.1264
180 Day 23.2949
USD 1 Month 0.97722
USD 2 Months 1.02000
USD 3 Months 1.15622
USD 6 Months 1.43489
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 22-Jun-17 17.22
182d 21-Sep-17 19.67
364d 01-Mar-18 22.09
2y 29-Jun-19 15.74
3y 13-Feb-20 15.93
5y 15-Jul-21 16.00
Indicative Currency Exchange Rates
USDNGN 314.50 315.00
EURUSD 1.0690 1.0892
GBPUSD 1.2373 1.2574
USDJPY 111.58 111.29
USDCHF 0.98765 0.9978
GBPEUR 1.1454 1.1658
USDZAR 12.5417 12.7451
JPYNGN 2.7797 2.8803
CHFNGN 316.29 317.98
EURNGN 334.14 335.50