12 July 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: The Federal Government, yesterday painted a gloomy picture on the expectations of Nigerians as regards the provision of essential infrastructure, payment of workers salary as well as delivery of other services. According to the government, the annual budgetary provisions available is not enough to meet all the required needs of the people. This is as the Acting President, Prof. Yemi Osinbajo, assured, however, that the government was working round the clock to reposition the economy, stressing that with determined efforts and focus, the challenges could be over in the next 12 months
FX: Activity in the I&E window was seen between the range of $/NGN 364-367 with decent offers on the day within those levels. Yesterday’s turnover was reported at $85.7m. The CB also released the results for the last wholesale auction.
FIXED INCOME: Positive tone in bills yesterday though we mostly traded the short dates for obvious reasons. A good chunk of the enquiries from local and offshore accounts remain on bills. Bond market returned to quiet mode before closing tighter on the day. O/N closed at 16%. N24.6bn was sold at yesterday’s regular OMO auction.
U.S.: The dollar was stuck near its lowest in more than a year against the euro on Wednesday while stocks edged higher in light trading ahead of Janet Yellen’s testimony to Congress.
While the Federal Reserve chair is expected to say that the Fed remains on a hawkish course of steadily rising rates, any signals on how the bank is viewing a retreat in inflation and muted wage growth will be closely watched.
Comments overnight from two of her colleagues calling for caution on further interest rate rises have pushed back the probability of a hike again before the end of the year to 50%, according to the CME’s Fed watch data.
“The Yellen testimony remains the key event risk in today’s session but we remain optimistic about the dollar’s outlook and putting on a long position against the sterling is the best way to execute that view,” said Adam Cole, head of FX strategy at RBC Capital Markets in London.
U.K: Bank of England Deputy Governor Ben Broadbent said he’s not ready to vote for higher interest rates, even though he sees pressures to do so building up.
“There is a reason to see the committee moving in that direction, but there are still a lot of imponderables,” Broadbent said in an interview with The Press and Journal. “It is a bit tricky at the moment to make a decision.”
Ten years to the month since Britain last raised borrowing costs, the BOE faces a diverging economy.
COMMODITIES: Oil extended gains toward $46 a barrel as U.S. industry data showed crude and gasoline stockpiles declined, easing a glut.
Futures advanced as much as 2% in New York after rising 1.8% in the previous two sessions. Crude inventories fell by 8.13 million barrels last week, the American Petroleum Institute was said to report. If the decline is replicated in government data Wednesday, it will be the biggest decrease since September. Gasoline supplies shrank by 801,000 barrels, the API said.
Macro Economic Indicators
Inflation rate (Y-o-Y) for May 2017 16.25%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at July 06, 2017 30.333
Money Market Highlights
30 Day 20.4652
90 Day 21.9785
180 Day 23.6732
USD 1 Month 1.22389
USD 2 Months 1.25500
USD 3 Months 1.30411
USD 6 Months 1.46211
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 12-Oct-17 19.30
182d 11-Jan-18 20.74
364d 21-Jun-18 22.68
2y 29-Jun-19 16.54
3y 14-Jun-20 16.32
5y 27-Jan-22 16.10
Indicative Currency Exchange Rates
USDNGN 314.50 315.00
EURUSD 1.1347 1.1549
GBPUSD 1.2761 1.2963
USDJPY 113.36 113.37
GBPEUR 1.1133 1.1336
USDZAR 13.3489 13.5537
EURNGN 358.27 361.00
GBPNGN 404.12 405.52