23 May 2017, Sweetcrude, Houston, Texas — The local and international financial market products and services update.
NIGERIA: The Federal Government of Nigeria’s fiscal deficit ran at a 12-month high in the month of February, according to data provided by the Central Bank, as actual revenues flunked budget targets and officials overshot spending. At N404.9 billion in February, the deficit is almost four times the monthly provisional budget estimate of N185 billion, with the government amassing debt at a frantic pace to shore up ailing revenues.
FIXED INCOME: The bond and t-bill markets opened the week in a sluggish manner, as there was little interest on both supply and demand. There was a bit of buying in the bonds space which was led by the 2036s; the maturity traded a total of 6.3bn at a close of the day. Average bond yield dropped marginally to close at 16.86%. T-bill yield also dropped by 10bps, but this was more of price actions rather than actual trades. Average yield closed at 20.89%. CBN floated two OMO bills yesterday, but the outcome is clear that demand for the OMO bills has significantly cooled off because of the money market condition. O/N opened flat this week at 20%.
FX: CB held a wholesale auction with $100m on offer, raising the estimated amount offered (wholesale and retail) in the past 3 months to no less than $4.2bn. Indicative levels in the I&E window was between $/NGN 381.50 – 382.50.
E.U.: Portugal has become the latest bailed-out eurozone country to receive a clean bill of health from the European Commission after its budget deficit fell to 2% of GDP last year. This brings it well below the EU limit of 3% and allows it to exit the Commission’s excessive debt procedure. After its 2011 bailout, Portugal saw austerity policies under a centre-right government until elections in 2015. Since then, a Socialist-led coalition has reversed those austerity measures. EU economy commissioner Pierre Moscovici said the outcome was “extremely good news” for Portugal. The Portuguese finance ministry hailed the Commission’s decision, calling it a “turning point”.
U.S.A.: The White House on Tuesday will ask Republicans who control the U.S. Congress – and federal purse strings – to slash spending on healthcare and food assistance programs for the poor as they push ahead on plans to cut taxes and trim the deficit. President Donald Trump is set to propose a raft of politically sensitive cuts in his first full budget, for the fiscal year that starts in October, a proposal that some analysts expected would be put aside by lawmakers as they craft their own budget and spending plans. Trump, who is traveling overseas and will miss the unveiling of his plan, wants lawmakers to cut $3.6 trillion in government spending over 10 years, balancing the budget by the end of the decade, according to a preview given to reporters on Monday. More than $800 billion would be cut from the Medicaid program for the poor and more than $192 billion from food stamps.
COMMODITIES: Oil halted its advance after a four-day gain before OPEC meets Thursday to decide on whether to prolong output cuts by the group and its partners. Brent for July settlement fell 37 cents to $53.50 a barrel on the London-based ICE Futures Europe exchange.
Macro Economic Indicators
Inflation rate (Y-o-Y) for April 2017 17.24%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at May 19, 2017, 30.665
Money Market Highlights
NIBOR (%)
O/N 40.7083
30 Day 20.8195
90 Day 22.3836
180 Day 24.7081
LIBOR (%)
USD 1 Month 1.01711
USD 2 Months 1.09611
USD 3 Months 1.18644
USD 6 Months 1.41517
Benchmark Yields
Tenor Maturity Yield (%)
91d 17-Aug-17 19.10
182d 16-Nov-17 21.01
364d 03-May-18 22.68
2y 29-Jun-19 16.49
3y 13-Feb-20 16.34
5y 27-Jan-22 16.23
Indicative Currency Exchange Rates
Bid Offer
USDNGN 314.50 315.00
EURUSD 1.1148 1.135
GBPUSD 1.2890 1.3092
USDJPY 111.22 111.25
USDCHF 0.96655 0.9767
GBPEUR 1.1448 1.1652
USDZAR 13.1752 13.3786
EURNGN 353.59 354.95
GBPNGN 411.59 412.99