27 March 2017, Sweetcrude, Lagos — The local and international financial market products and services updates.
NIGERIA: Capital released to Nigeria’s ministries and government agencies under the 2016 budget has reached a record 1 trillion naira ($3.3 billion), the finance minister said on Sunday. Development in Africa’s largest economy has been stunted by a lack of much-needed investment to improve its ailing road, the rail and electricity network. “So far, 1 trillion Naira has been released on capital and this is the highest so far in the history of this country,” Kemi Adeosun said during a presentation to members of a committee of lawmakers from the lower chamber of parliament. Adeosun, whose comments were detailed in an emailed statement, said the money was released for projects that included road improvements, expansion of irrigation facilities and the upgrading of the country’s aviation infrastructure.
FX: No change on interbank – closing rate advised at $307.00. The CB continues to offer USD at the SMIS auction. Offers on the parallel market dipped firmly below 400 to $/NGN390 [levels last seen in August 2016].
FIXED INCOME: With the current momentum, next resistance level on bonds could easily be 15.50% yield. Demand remains skewed to the Jul 21s, Jan 26s and Mar 36s. The moves lower are still driven by positioning for next month’s ‘huge’ maturity. The tone in bill market was equally strong as FAAC payments came in and boosted liquidity.
COMMODITIES: Oil producers pledged to consider extending their pact limiting supply, as half a dozen nations said more time was needed to drain swollen stockpiles.
Five OPEC members and Oman backed an extension, with Kuwait saying it should be for six months. The ministers met this weekend in Kuwait City and asked the Organization of Petroleum Exporting Countries to make a recommendation in a month on the possibility of prolonging the supply curbs.
Brent crude, the global benchmark, was trading down 6 cents at $50.74 a barrel as of 1:04 p.m. in Singapore on Monday.
U.S: The Federal Reserve has room for two more rate increases this year, as the economy seems “reasonably close” to full employment and is likely to gather pace, former Federal Reserve Bank of Atlanta President Dennis Lockhart said.
“The committee is pretty solidly optimistic about the outlook for at least the medium term, and that would be the continuation of a moderate pace of growth,” Lockhart said in an interview with Bloomberg Television’s Yvonne Manin Hong Kong on Monday. “It’s appropriate to begin to remove a little bit of the ultra-accommodation.”
E.U.: Another week, another round of gently improving economic data in the euro area — with one exception.
While confidence is on the rise and output in manufacturing and services motoring along, inflation is set to slow for the first time in almost a year as energy-price effects gradually peter out. The latest rush of numbers due from across the 19-nation region will probably bear out Mario Draghi’s view that the European Central Bank’s actions have largely been a “success,” though more stimulus is needed to make temporary improvements permanent.
Confidence that price pressures will eventually follow the steadily firming recovery has fueled a debate about unwinding unconventional stimulus — no longer just among economists. Governing Council members have started to think about how to communicate an exit, cautioning at the same time that it is yet too soon to act.
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 23, 2017, 30.348
Money Market Highlights
30 Day 17.4579
90 Day 20.9965
180 Day 23.1713
USD 1 Month 0.98278
USD 2 Months 1.02278
USD 3 Months 1.15128
USD 6 Months 1.42711
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 22-Jun-17 18.69
182d 21-Sep-17 19.95
364d 15-Mar-18 22.59
2y 29-Jun-19 15.79
3y 13-Feb-20 15.93
5y 27-Jan-22 15.59
Indicative Currency Exchange rates
USDNGN 314.50 315.00
EURUSD 1.0766 1.0967
GBPUSD 1.2461 1.2665
USDJPY 110.25 110.27
USDCHF 0.97995 0.9902
GBPEUR 1.1458 1.1662
USDZAR 12.2604 12.4626
JPYNGN 2.7397 2.8403
CHFNGN 311.32 313.01
EURNGN 334.14 335.50